Credit Expansion in Emerging Markets Propeller of Growth?

This paper explores the contribution of credit growth and the composition of credit portfolio (corporate, consumer, and housing credit) to economic growth in emerging market economies (EMs). Using cross-country panel regressions, we find significant impact of credit growth on real GDP growth, with t...

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Bibliographic Details
Main Author: Garcia-Escribano, Mercedes
Other Authors: Han, Fei
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2015
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a Credit Expansion in Emerging Markets  |b Propeller of Growth?  |c Mercedes Garcia-Escribano, Fei Han 
260 |a Washington, D.C.  |b International Monetary Fund  |c 2015 
300 |a 24 pages 
651 4 |a Brazil 
653 |a Consumer credit 
653 |a Wealth 
653 |a Credit 
653 |a Private consumption 
653 |a Monetary economics 
653 |a Saving 
653 |a Monetary Policy, Central Banking, and the Supply of Money and Credit: General 
653 |a National accounts 
653 |a Money 
653 |a Consumption; Economics 
653 |a Consumption 
653 |a Financial Markets and the Macroeconomy 
653 |a Money Supply 
653 |a Macroeconomics 
653 |a Macroeconomics: Consumption 
653 |a Credit booms 
653 |a Money Multipliers 
653 |a Money and Monetary Policy 
700 1 |a Han, Fei 
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520 |a This paper explores the contribution of credit growth and the composition of credit portfolio (corporate, consumer, and housing credit) to economic growth in emerging market economies (EMs). Using cross-country panel regressions, we find significant impact of credit growth on real GDP growth, with the magnitude and transmission channel of the impact of credit on real activity depending on the specific type of credit. In particular, the results show that corporate credit shocks influence GDP growth mainly through investment, while consumer credit shocks are associated with private consumption. In addition, taking Brazil as a case study, we use a time series model to examine the role that the expansion and composition of credit played in driving real GDP growth in the past. The results of the case study are consistent with those found in the cross-country panel regressions