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Impact of Bank Credits on Economic Growth and Inflation

Author

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  • Suna Korkmaz

Abstract

Economic functioning will be realized non-problematically to an extent that countries can achieve financial deepening. Financial deepening will provide an important role for particularly transferring funds that are created by banks to real sector. Whether domestic credits created by banking sector have any effect on macro-economic variables such as inflation and economic growth for 10 chosen European countries was tested via panel data analysis. Annual data for 2006-2012 were used. As a result of panel data analysis, it was proved that domestic credits created by banking sector for 10 European countries did not affect inflation but did affect economic growth.

Suggested Citation

  • Suna Korkmaz, 2015. "Impact of Bank Credits on Economic Growth and Inflation," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 5(1), pages 1-4.
  • Handle: RePEc:spt:apfiba:v:5:y:2015:i:1:f:5_1_4
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    Cited by:

    1. Tanni Roy & Md. Emran Hossain & Md. Jahid Ebn Jalal & Jiban Krishna Saha & Eshrat Sharmin & Md. Akhtaruzzaman Khan, 2021. "Effects of credit on national and agricultural GDP, and poverty: a developing country perspective," SN Business & Economics, Springer, vol. 1(10), pages 1-20, October.
    2. Alaba John, Stephen & Yetunde Lawal, Rodiat, 2019. "Impact Of Sectoral Allocation Of Banks' Credit On Economic Growth In Nigeria," International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), The Institute of Chartered Accountants of Nigeria (ICAN), vol. 8(2), pages 96-113, September.
    3. Serhat Yuksel & Mustafa Ozsari, 2016. "Impact of Consumer Loans on Inflation and Current Account Deficit: A Toda Yamamoto Causality Test for Turkey," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 2(2), pages 3-14, December.
    4. Zhang, Ying & Zhai, Ling & Sun, Haijia, 2019. "Does the level of financial leasing matter in the impact of bank lending on economic growth: Evidence from the global market (2006–2016)," Finance Research Letters, Elsevier, vol. 30(C), pages 352-359.
    5. David Salvador Cisneros Zepeda, 2022. "Los efectos del crédito bancario otorgado a la industria y al consumo en el crecimiento económico: evidencia de México, 1994-2017," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 17(2), pages 1-25, Abril - J.
    6. Sonny Nwonodi AMADI & Victor AKIDI & Samuel BIIRA, 2024. "Private Sector Investments: The Implication of Deposit Money Banks’ Credits in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(12), pages 576-586, January.
    7. Lidiema, Caspah, 2024. "Monetary-fiscal policy interdependence and pricing dynamics: Empirical estimation of fiscal dominance in Kenya," KBA Centre for Research on Financial Markets and Policy Working Paper Series 83, Kenya Bankers Association (KBA).
    8. ANYANWU, Felicia Akujinma & ANANWUDE, Amalachukwu Chijindu & OKOYE, Ngozi Theodora, 2017. "An Empirical Assessment of the Impact of Commercial Banks’ Lending on Economic Development of Nigeria," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 1(1), pages 14-29.
    9. Saba Mushtaq, 2016. "Causality between bank’s major activities and economic growth: evidences from Pakistan," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-11, December.
    10. Innocent Odiniya Alhassan & Willy Nelson Ogoja & Ekadi Ebikiwenimo Hannah & Williams Blessing Nkemakonam, 2022. "Impact of Financial Intermediation on Economic Growth in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 9(6), pages 70-78, June.
    11. Faris Nasif Alshubiri & Omar Ikbal Tawfik & Syed Ahsan Jamil, 2020. "Impact of petroleum and non-petroleum indices on financial development in Oman," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-22, December.
    12. Witness Nyasha Bandura & Temitope L. A. Leshoro, 2022. "Inflation And Financial Development In Sub-Saharan Africa," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(233), pages 85-112, April – J.
    13. Mohammed AL Mahish, 2016. "The Impact of Financing on Economic Growth in Saudi Arabia," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(8), pages 1-1, August.
    14. Llesh Lleshaj & Dorina Kripa, 2021. "The Effect of Financial Leasing Threshold in the Financial Development and Economic Growth: Evidence from Albania," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 165-177.
    15. Peter Nderitu Githaiga & Josephat Cheboi Yegon & Joyce Kimosop Komen, 2019. "Does the ‘Process’ of Process Capital Matter to Performance? Evidence from Kenyan Commercial Banks," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 10(2), pages 37-46, May.
    16. Suwareh Darbo & Amandine Nakumuryango, 2018. "Working Paper 305 - Inflation Dynamics In Post-Secession Sudan," Working Paper Series 2432, African Development Bank.
    17. Lumnije Thaçi, 2022. "Bank Loans Types and Economic Growth - Literature Review," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 8, July -Dec.
    18. Aušrinė Lakštutienė & Aida Barkauskaitė, 2016. "Evaluation of relationship between banks lending activities and the economies in Baltic countries," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 5(1), pages 141-156.

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