Author: Anari Ali Kolari James Pynnönen Seppo Suvanto Antti
Publisher: Routledge Ltd
ISSN: 1466-4283
Source: Applied Economics, Vol.34, Iss.3, 2002-02, pp. : 267-278
Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.
Abstract
The present paper provides further empirical evidence on the credit view (i.e., bank credit availability has a positive impact on macroeconomic activity) by investigating the case of Finland. The Finnish economy suffered a severe recession in the early 1990s that was marked by widespread banking crisis and extensive government intervention. Using monthly data for the 1980–1996 period, unrestricted and restricted vector autoregression (VAR) models with GDP, money supply, consumer prices, bank credit, and exports were estimated. It is found that, while money supply had the largest effect on economic output, bank credit exhibited a fairly strong effect on output that exceeded price effects for the most part. Exports had little impact on fluctuations in GDP but did help to explain industrial output changes over time. Based on these results, it is concluded that there is empirical support for the credit view in Finland. By implication, government intervention in Finland to restore safety and soundness during the banking crisis likely limited further damage to the macroeconomy associated with disruption of credit intermediation services.
Related content
RICARDIAN EQUIVALENCE: FURTHER EVIDENCE
By CHAKRABORTY ATREYA FARAH ABDIKARIM M.
International Economic Journal, Vol. 10, Iss. 3, 1996-0 ,pp. :
On scale effects: further evidence
Applied Economics Letters, Vol. 9, Iss. 4, 2002-03 ,pp. :
Is utility additive? Further evidence
By Selvanathan Saroja Selvanathan E. A.
Applied Economics, Vol. 37, Iss. 1, 2005-01 ,pp. :
Further evidence on the Fisher effect
Applied Economics, Vol. 28, Iss. 7, 1996-07 ,pp. :