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Credit Crunch in Germany?

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  • Nehls, Hiltrud
  • Schmidt, Torsten

Abstract

This paper evaluates whether the Germany economy is currently affected by a credit crunch,i.e.a supply-side restriction of loans that is not in line with market interest rates and profitability of investment projects.With help of a disequilibrium-model,we calculate a credit supply and a demand-function.We compare estimated demand with estimated supply,finding a considerable ex- cess-demand particularly in the second half of 2002.The main reason for this restriction is the drop in earnings in the banking sector.Applying the model to Großbanken (big banks)and other credit institutions separately,shows that the situation in the former is more severe than in the latter.

Suggested Citation

  • Nehls, Hiltrud & Schmidt, Torsten, 2003. "Credit Crunch in Germany?," RWI Discussion Papers 6, RWI - Leibniz-Institut für Wirtschaftsforschung.
    • Handle: RePEc:zbw:rwidps:6
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Andrés Murcia Pabón, 2007. "Determinantes del acceso al crédito de los hogares colombianos," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 25(55), pages 40-83, December.
    2. Mirna Dumičić & Igor Ljubaj, 2017. "Delayed Credit Recovery in Croatia:Supply or Demand Driven?," Working Papers 45, The Croatian National Bank, Croatia.
    3. Cheng Few Lee & Chiung-Min Tsai & Alice C. Lee, 2020. "Asset Pricing with Disequilibrium Price Adjustment: Theory and Empirical Evidence," World Scientific Book Chapters, in: Cheng Few Lee & John C Lee (ed.), HANDBOOK OF FINANCIAL ECONOMETRICS, MATHEMATICS, STATISTICS, AND MACHINE LEARNING, chapter 99, pages 3491-3516, World Scientific Publishing Co. Pte. Ltd..
    4. Claessens, Stijn & Sakho, Yaye Seynabou, 2013. "Assessing firms'financing constraints in Brazil," Policy Research Working Paper Series 6624, The World Bank.
    5. Ana Maria Čeh & Mirna Dumičić & Ivo Krznar, 2011. "A Credit Market Disequilibrium Model And Periods of Credit Crunch," Working Papers 28, The Croatian National Bank, Croatia.
    6. Rebeca Anguren Martín, 2011. "Credit cycles: Evidence based on a non linear model for developed countries," Working Papers 1113, Banco de España.
    7. Didarul Islam, 2022. "Determinants of Domestic Bank Credit to Private sectors in Bangladesh: An Empirical Investigation," Journal of Economic Impact, Science Impact Publishers, vol. 4(2), pages 65-74.
    8. Jiménez Polanco, Miguel Alejandro & Ramírez de Leon, Francisco Alberto, 2018. "Análisis del canal del crédito en presencia de racionamiento: Evidencia para Centroamérica y la República Dominicana [Credit Channel Analysis in Presence of Credit Crunches: Evidence for Central Am," MPRA Paper 87712, University Library of Munich, Germany.
    9. Ramirez, Francisco A., 2012. "Crédito Al Sector Privado En República Dominicana (1997-2011): ¿Existe Evidencia De Racionamiento Del Crédito? [Private Sector Loans in the Dominican Republic (1997-2011):Is There Evidence of credi," MPRA Paper 68333, University Library of Munich, Germany.
    10. Nikolai Lazarov, 2022. "Evaluation of the factors influencing household lending in Bulgaria," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 221-238.
    11. Haunschild, Ljuba, 2004. "Leasing in mittelständischen Unternehmen: Ergebnisse einer schriftlichen Befragung," Leasing - Wissenschaft & Praxis, Universität zu Köln, Forschungsinstitut für Leasing, vol. 2(3), pages 3-98.
    12. Bofinger, Peter & Maas, Daniel & Ries, Mathias, 2017. "A model of the market for bank credit: The case of Germany," W.E.P. - Würzburg Economic Papers 98, University of Würzburg, Department of Economics.
    13. Nada Oulidi & Laurence Allain, 2009. "Credit Market in Morocco: A Disequilibrium Approach," IMF Working Papers 2009/053, International Monetary Fund.

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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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