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GDP Growth and Credit Data

Ergun Ermisoglu, Yasin Akcelik and Arif Oduncu

MPRA Paper from University Library of Munich, Germany

Abstract: It is a well-known fact that there is a strong relationship between bank credits and economic activity. Thus, it is a reasonable question whether credit data can be used in nowcasting GDP growth. It is important for policymakers to make on-time decisions with the most available data and nowcasting is an important tool when policies in question are needed to be made based on current figures. Most macroeconomic variables are made available to public after a considerable delay; however, banking credit data may be very valuable for the early estimate of current GDP as it is available only with a few days delay. In this paper, we aim to investigate the feasibility of using credit data in explaining the variability in Turkish GDP growth and as well as nowcasting it. For this purpose, we use credit impulse and new borrowing, two measures of credit flows. We show that credit impulse and new borrowing are significant in explaining the pattern of the Turkish GDP growth and they have significant contribution to nowcasting it.

Keywords: Nowcasting GDP; Credit Impulse; New Borrowing (search for similar items in EconPapers)
JEL-codes: C22 C53 E37 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-ara and nep-fdg
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