IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v34y2002i3p267-278.html
   My bibliography  Save this article

Further evidence on the credit view: the case of Finland

Author

Listed:
  • Ali Anari
  • James Kolari
  • Seppo Pynnonen
  • Antti Suvanto

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.

Suggested Citation

  • Ali Anari & James Kolari & Seppo Pynnonen & Antti Suvanto, 2002. "Further evidence on the credit view: the case of Finland," Applied Economics, Taylor & Francis Journals, vol. 34(3), pages 267-278.
    • Handle: RePEc:taf:applec:v:34:y:2002:i:3:p:267-278
    DOI: 10.1080/00036840110047592
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840110047592
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036840110047592?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1.
    2. Jeffery W. Gunther & Robert R. Moore, 1993. "Credit conditions and macroeconomic activity: evidence from Mexico," Financial Industry Studies Working Paper 93-4, Federal Reserve Bank of Dallas.
    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. Leonardo Becchetti & Maria Melody Garcia & Giovanni Trovato, 2011. "Credit Rationing and Credit View: Empirical Evidence from an Ethical Bank in Italy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(6), pages 1217-1245, September.
    2. Ferreira, Paula & Soares, Isabel & Araujo, Madalena, 2005. "Liberalisation, consumption heterogeneity and the dynamics of energy prices," Energy Policy, Elsevier, vol. 33(17), pages 2244-2255, November.
    3. Leonardo Becchetti & Melody Garcia & Giovanni Trovato, 2009. "Credit rationing and credit view: empirical evidence from loan data," CEIS Research Paper 144, Tor Vergata University, CEIS, revised 30 Sep 2009.
    4. Rondorf, Ulrike, 2012. "Are bank loans important for output growth?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(1), pages 103-119.

    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. Mark Carlson & Kris James Mitchener, 2009. "Branch Banking as a Device for Discipline: Competition and Bank Survivorship during the Great Depression," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 165-210, April.
    2. KAMKOUM, Arnaud Cedric, 2023. "The Federal Reserve’s Response to the Global Financial Crisis and its Effects: An Interrupted Time-Series Analysis of the Impact of its Quantitative Easing Programs," Thesis Commons d7pvg, Center for Open Science.
    3. P. D. Jonson, 1979. "The State of Australian Economics: Stabilization and Industry Policies: A review article stimulated by F. H. Gruen (ed.), Surveys of Australian Economics, Volume 1," The Economic Record, The Economic Society of Australia, vol. 55(4), pages 297-305, December.
    4. Sriya Anbil & Mark A. Carlson & Christopher Hanes & David C. Wheelock, 2020. "A New Daily Federal Funds Rate Series and History of the Federal Funds Market, 1928-1954," Finance and Economics Discussion Series 2020-059, Board of Governors of the Federal Reserve System (U.S.).
    5. Metiu, Norbert, 2021. "Anticipation effects of protectionist U.S. trade policies," Journal of International Economics, Elsevier, vol. 133(C).
    6. Maria Soledad Martinez Peria, 2002. "The Impact of Banking Crises on Money Demand and Price Stability," IMF Staff Papers, Palgrave Macmillan, vol. 49(3), pages 1-1.
    7. George S. Tavlas, 2015. "In Old Chicago: Simons, Friedman, and the Development of Monetary‐Policy Rules," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(1), pages 99-121, February.
    8. Angeloni, Ignazio, 1999. "The role of a regional bank in a system of central banks : A comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 51(1), pages 73-77, December.
    9. Huberto Ennis & Todd Keister, 2016. "Optimal banking contracts and financial fragility," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(2), pages 335-363, February.
    10. Mervyn Allister King, 1993. "Debt Deflation: Theory and Evidence," FMG Discussion Papers dp175, Financial Markets Group.
    11. Edwards, Sebastian, 2020. "Change of monetary regime, contracts, and prices: Lessons from the great depression, 1932–1935," Journal of International Money and Finance, Elsevier, vol. 108(C).
    12. Hejie Zhang & Huiming Lv & Shenghau Lin, 2021. "Financial Development, Saving Rates, and International Economic Volatility: A Simple Model," Mathematics, MDPI, vol. 9(16), pages 1-20, August.
    13. ASIANI, Freddy, 2020. "La sensibilité de l'économie congolaise face aux chocs monétaire et budgétaire : une approche en modèle var standard [The sensitivity of the congolese economy to monetary and budgetary shocks: a st," MPRA Paper 101255, University Library of Munich, Germany.
    14. Bonga-Bonga, Lumengo & Kabundi, Alain, 2015. "Monetary Policy Instrument and Inflation in South Africa: Structural Vector Error Correction Model Approach," MPRA Paper 63731, University Library of Munich, Germany.
    15. Emi Nakamura & Jón Steinsson, 2013. "Price Rigidity: Microeconomic Evidence and Macroeconomic Implications," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 133-163, May.
    16. Peter J. Boettke & Alexander W. Salter & Daniel J. Smith, 2018. "Money as meta-rule: Buchanan’s constitutional economics as a foundation for monetary stability," Public Choice, Springer, vol. 176(3), pages 529-555, September.
    17. International Association for Islamic Economics, 2009. "Economic Solutions From Islamic Finance: Position Statement of the International Association for Islamic Economics الحلول الاقتصادية من التمويل الإسلامي: بيان موقف الجمعية الدولية للاقتصاد الإسلامي," Chapters of books published by the Islamic Economics Institute, KAAU or its faculty members., in: Islamic Economics Institute (ed.),Issues in the International Financial Crisis from an Islamic Perspective-05 قضايا في الأزمة المالية الدولية من منظور إسلامي, edition 1, chapter 16, pages 265-269, King Abdulaziz University, Islamic Economics Institute..
    18. Alfred Duncan & Charles Nolan, 2020. "Reform of the UK Financial Policy Committee," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(1), pages 1-30, February.
    19. Goodhart, Charles, 1989. "The Conduct of Monetary Policy," Economic Journal, Royal Economic Society, vol. 99(396), pages 293-346, June.
    20. Livio Di Matteo & Angela Redish, 2015. "The evolution of financial intermediation: Evidence from 19th-century Ontario microdata," Canadian Journal of Economics, Canadian Economics Association, vol. 48(3), pages 963-987, August.

    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:taf:applec:v:34:y:2002:i:3:p:267-278. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    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.