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The Contribution of Loans to Economic Activity

Author

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  • Gianluca Cafiso

Abstract

We study the contribution of loans, granted to different borrower groups, to economic activity in the USA over the period 1971q1-2018q4. Significant economic recessions occurred along the period considered, we center our discussion around the recent Global Financial Crisis. Results are delivered through a historical decomposition analysis based on the estimation of a large VAR through Bayesian techniques. Loans to households emerge as the most important driver of economic activity when compared to other groups, mortgages contribute the most with respect to other typologies. The analysis shows that loan shocks have truly undermined economic activity during the Global Financial Crisis.

Suggested Citation

  • Gianluca Cafiso, 2020. "The Contribution of Loans to Economic Activity," CESifo Working Paper Series 8530, CESifo.
    • Handle: RePEc:ces:ceswps:_8530
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    More about this item

    Keywords

    loans; economic activity; households; corporate business; non-corporate business; Bayesian VAR; historical decomposition;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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