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Consumer Loans Dynamics in 2020 in Argentina: An Approach Using Error Correction Models

Author

Listed:
  • Maximiliano Gomez Aguirre

    (Central Bank of Argentina)

  • Ariel Krysa

    (Central Bank of Argentina)

Abstract

With the aim of quantifying the effect of the decrease in interest rates on consumer loans (both credit cards and personal loans, in local currency to the non-financial private sector) in Argentina between March and December 2020, monthly error correction models are estimated, and counterfactual scenarios are developed for each of the credit lines. The sample that is used includes the period 2004-2020 and the determinants are the corresponding interest rates and economic activity measures. As an alternative case, it is assumed that interest rates would have been fixed in 2020 at the values of February that year and/or that the parameters of elasticities that operated in the consumer credit markets were those associated with the pre-COVID-19 context. The counterfactual scenarios implemented within the econometric models suggest that the decline in the interest rate would have cushioned, with different magnitudes throughout 2020, the fall caused by effects of the pandemic both in the credit cards and personal loans real balances.

Suggested Citation

  • Maximiliano Gomez Aguirre & Ariel Krysa, 2022. "Consumer Loans Dynamics in 2020 in Argentina: An Approach Using Error Correction Models," BCRA Working Paper Series 202298, Central Bank of Argentina, Economic Research Department.
    • Handle: RePEc:bcr:wpaper:202298
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    consumption credit; COVID-19 crisis; Argentina; credit cards; personal loans;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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