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Interactions between Money, Lending and Investment in the UK Private Non‐Financial Corporate Sector

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  • Andrew Brigden
  • Paul Mizen

Abstract

In this paper we consider the additional information to be derived from modelling lending, investment and money in a jointly determined system of equations. We allow demand‐ and supply‐side effects to influence the money, investment and lending equations. Using UK corporate data, we find acceptable equilibrium equations for investment, lending and money with a causal chain running from money and lending to investment and money to lending in a dynamic model. There is clear support for ‘value added’ from a lending equation and support for interactions between financial variables and real economic activity.

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  • Andrew Brigden & Paul Mizen, 2004. "Interactions between Money, Lending and Investment in the UK Private Non‐Financial Corporate Sector," Manchester School, University of Manchester, vol. 72(1), pages 72-99, January.
    • Handle: RePEc:bla:manchs:v:72:y:2004:i:1:p:72-99
    DOI: 10.1111/j.1467-9957.2004.00381.x
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    Cited by:

    1. Guglielmo Maria Caporale & Luis Alberiko Gil-Alana & Nicola Rubino & Inmaculada Vilchez, 2024. "Modelling Loans to Non-Financial Corporations in the Eurozone: A Long-Memory Approach," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 30(3), pages 231-254, August.
    2. Guglielmo Maria Caporale & Luis A. Gil-Alana, 2020. "Modelling Loans to Non-Financial Corporations within the Eurozone: A Long-Memory Approach," CESifo Working Paper Series 8674, CESifo.
    3. Kok, Christoffer & Rossi, Carlotta & Marqués-Ibáñez, David, 2009. "Modelling loans to non-financial corporations in the euro area," Working Paper Series 989, European Central Bank.

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