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Catching up or drifting apart: Convergence of household and business credit in Europe

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  • Bahadir, Berrak
  • Valev, Neven

Abstract

We provide evidence for convergence in the levels of household and business credit across European countries. The process is particularly strong for the transition countries that have a low initial level of private credit and are catching up with Western Europe. However, the convergence is associated mostly with household credit, including housing loans and consumer credit, which may limit its benefits for economic growth.

Suggested Citation

  • Bahadir, Berrak & Valev, Neven, 2017. "Catching up or drifting apart: Convergence of household and business credit in Europe," International Review of Economics & Finance, Elsevier, vol. 47(C), pages 101-114.
    • Handle: RePEc:eee:reveco:v:47:y:2017:i:c:p:101-114
    DOI: 10.1016/j.iref.2016.10.006
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    4. Brůha, Jan & Kočenda, Evžen, 2018. "Financial stability in Europe: Banking and sovereign risk," Journal of Financial Stability, Elsevier, vol. 36(C), pages 305-321.
    5. Léon, Florian, 2018. "Convergence of credit structure around the world," Economic Modelling, Elsevier, vol. 68(C), pages 306-317.
    6. Sanket Mohapatra & Siddharth M. Purohit, 2021. "The implications of economic uncertainty for bank loan portfolios," Applied Economics, Taylor & Francis Journals, vol. 53(45), pages 5242-5266, September.
    7. Damane, Moeti, 2024. "Quantile Regression Analysis of the Economic Impact of Business and Household Credit in Lesotho," MPRA Paper 121954, University Library of Munich, Germany.
    8. Berrak Bahadir & Neven Valev, 2021. "Credit information sharing and the shift in bank lending towards households," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 60-72, January.
    9. Pagliacci, Carolina, 2019. "Dynamic credit convergence in CARD: The spreading of common shocks," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    10. Mirgul Nizaeva & Ali Coskun, 2019. "Investigating the Relationship Between Financial Constraint and Growth of SMEs in South Eastern Europe," SAGE Open, , vol. 9(3), pages 21582440198, September.
    11. Massimiliano Affinito & Raffaele Santioni & Luca Tomassetti, 2023. "Inside household debt: disentangling mortgages and consumer credit, and household and bank factors. Evidence from Italy," Questioni di Economia e Finanza (Occasional Papers) 788, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    G01; E22; Household credit; Business credit; Convergence;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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