IDEAS home Printed from https://ideas.repec.org/a/eee/quaeco/v48y2008i2p307-319.html
   My bibliography  Save this article

Loans, risks, and growth: The role of government and public banking in Paraguay

Author

Listed:
  • Insfrán Pelozo, José Ani­bal

Abstract

In Paraguay, banks are the center of the financial sector and provide the main source of external financing for corporations and small companies. Therefore, their behavior as credit providers has important effects on business investments. This paper presents a model that illustrates this fact and explains how it can be applied to any less-developed economy with a similar financial sector. In this model, the financial sector (bank loans) affects the long-run growth of the economy through the changes in the probability of loans repayment and other risks. In addition it is shown that governments have an important double role in the financial sector, providing adequate regulation and reducing specific identified market failures.

Suggested Citation

  • Insfrán Pelozo, José Ani­bal, 2008. "Loans, risks, and growth: The role of government and public banking in Paraguay," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 307-319, May.
    • Handle: RePEc:eee:quaeco:v:48:y:2008:i:2:p:307-319
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1062-9769(07)00030-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    2. Waller, Christopher J. & Lewarne, Stephen, 1994. "An expository model of credit rationing," Journal of Macroeconomics, Elsevier, vol. 16(3), pages 539-545.
    3. Santomero, Anthony M, 1984. "Modeling the Banking Firm: A Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(4), pages 576-602, November.
    4. Richard Startz, 1983. "Competition and Interest Rate Ceilings in Commercial Banking," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 255-265.
    5. Pagano, Marco, 1993. "Financial markets and growth: An overview," European Economic Review, Elsevier, vol. 37(2-3), pages 613-622, April.
    6. Reinhart, Carmen & Calvo, Guillermo & Fernandez Arias, Eduardo & Talvi, Ernesto, 2001. "Growth and External Financing in Latin America," MPRA Paper 9074, University Library of Munich, Germany.
    7. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    8. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    9. Hannan, Timothy H, 1991. "Foundations of the Structure-Conduct-Performance Paradigm in Banking," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(1), pages 68-84, February.
    10. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    11. World Bank, 2001. "Finance for Growth : Policy Choices in a Volatile World," World Bank Publications - Books, The World Bank Group, number 13895.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Muhammad Kashif & Syed Faizan Iftikhar & Khurram Iftikhar, 2016. "Loan growth and bank solvency: evidence from the Pakistani banking sector," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-13, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zaiter Lahimer, Mahjouba, 2011. "L’impact des entrées de capitaux privés sur la croissance économique dans les pays en développement," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/7670 edited by Sterdyniak, Henri.
    2. Carton, Christine & Ronquillo, Cely, 2008. "Determinantes del crecimiento económico e intermediación bancaria: un análisis empírico para países latinoamericanos [Determinants of economic growth and bank intermediation: empirical analysis for," MPRA Paper 15514, University Library of Munich, Germany, revised 25 Nov 2008.
    3. repec:zbw:rwidps:0030 is not listed on IDEAS
    4. Günther Rehme, 2007. "Education, Economic Growth and Measured Income Inequality," Economica, London School of Economics and Political Science, vol. 74(295), pages 493-514, August.
    5. Bagella, Michele & Becchetti, Leonardo & Hasan, Iftekhar, 2004. "The anticipated and concurring effects of the EMU: exchange rate volatility, institutions and growth," Journal of International Money and Finance, Elsevier, vol. 23(7-8), pages 1053-1080.
    6. Olivier Parent & Abdallah Zouache, 2009. "Geographical Features vs. Institutional Factors: New Perspectives on The Growth of Africa and Middle-East," Working Papers 490, Economic Research Forum, revised Jun 2009.
    7. Carmela Martin & Francisco J. Velazquez & Bernard Funck, 2001. "European Integration and Income Convergence : Lessons for Central and Eastern European Countries," World Bank Publications - Books, The World Bank Group, number 13968.
    8. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    9. Alali, Walid Y., 2009. "Economic Performance and Institutions: Measuring Technical Efficiency Using SPF Approach," MPRA Paper 114336, University Library of Munich, Germany, revised Aug 2009.
    10. Thomas Barnebeck Andersen & Finn Tarp, 2003. "Financial liberalization, financial development and economic growth in LDCs," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(2), pages 189-209.
    11. Paul Auerbach & Jalal Uddin Siddiki, 2004. "Financial Liberalisation and Economic Development: An Assessment," Journal of Economic Surveys, Wiley Blackwell, vol. 18(3), pages 231-265, July.
    12. Claude Diebolt & Catherine Kyrtsou, 2006. "Non-Linear Perspectives for Population and Output Dynamics: New Evidence for Cliometrics," Working Papers 06-02, Association Française de Cliométrie (AFC).
    13. Alali, Walid Y., 2010. "Cross Countries Economic Performances - SPF Approach," EconStor Preprints 269923, ZBW - Leibniz Information Centre for Economics.
    14. Middendorf Torge, 2006. "Human Capital and Economic Growth in OECD Countries," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(6), pages 670-686, December.
    15. Beugelsdijk, S. & Smulders, J.A., 2009. "Bonding and Bridging Social Capital and Economic Growth," Discussion Paper 2009-27, Tilburg University, Center for Economic Research.
    16. Bos, J.W.B. & Economidou, C. & Koetter, M. & Kolari, J.W., 2010. "Do all countries grow alike?," Journal of Development Economics, Elsevier, vol. 91(1), pages 113-127, January.
    17. Walid Y Alali, 2009. "Cross Countries Economic Performances - SPF Approach," Post-Print hal-03832570, HAL.
    18. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    19. Paul Wachtel, 2003. "How much do we really know about growth and finance?," Economic Review, Federal Reserve Bank of Atlanta, vol. 88(Q1), pages 33-47.
    20. Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian, 2005. "Does financial liberalization spur growth?," Journal of Financial Economics, Elsevier, vol. 77(1), pages 3-55, July.
    21. Fohlin, Caroline, 1999. "Universal Banking in Pre-World War I Germany: Model or Myth?," Explorations in Economic History, Elsevier, vol. 36(4), pages 305-343, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:quaeco:v:48:y:2008:i:2:p:307-319. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620167 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.