Credit Cyclicality in Chile: A Cross-Country Perspective

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Author/Editor: Ludvig Söderling
Release Date: © March, 2008
ISBN : 978-1-45186-917-0
Stock #: WPIEA2008055
English
Stock Status: Available

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Description

This paper analyzes the determinants of credit cyclicality. It constructs a financial development index and studies whether it affects the amplitude of impulse responses to shocks to output, terms of trade, global liquidity, and global risk appetite. The paper uses both country-specific VARs for cross-country analyses and panel VARs to compare impulse responses between various country groupings. The study finds evidence that financial development-especially stronger creditor rights-can mitigate credit cyclicality, given that the response of credit to output or terms of trade shocks is stronger in countries with weaker financial systems.

Taxonomy

Economic sectors , Private sector




More publications in this series: Working Papers


More publications by: Ludvig Söderling