An International Perspective on the Loan Puzzle in Emerging Markets☆

Asli Leblebicioglu () and Victor (Vic) Valcarcel

A chapter in Banking and Finance Issues in Emerging Markets, 2018, vol. 25, pp 163-191 from Emerald Group Publishing Limited

Abstract: In seminal work, Den Haan et al. (2007, 2010, 2011) show business loans respond in the opposite direction of what may be intended by monetary policy action in the United States and Canada. Based on various approaches, identification schemes, and samples, we document evidence thisloan puzzleis not exclusive to developed economies but is also pervasive in emerging markets. We find business loans generally decline following expansionary monetary policy shocks. A preponderance of statistical and structural evidence indicates important transmissions of this puzzle from the United States to emerging markets.

Keywords: Loan puzzle; bank lending channel; emerging markets; spillovers; monetary policy; block exogeneity; global identification; VAR; E30; E31; E65 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eme:isetez:s1571-038620180000025008

DOI: 10.1108/S1571-038620180000025008

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