Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153121
Authors: 
Egert, Balázs
Backé, Peter
Zumer, Tina
Year of Publication: 
2006
Series/Report no.: 
ECB Working Paper 687
Abstract: 
This paper analyzes the equilibrium level of private credit to GDP in 11 Central and Eastern European countries in order to see whether the high credit growth recently observed in some of these countries led to above equilibrium private credit-to-GDP levels. We use estimation results obtained for a panel of small open OECD economies (out-of-sample panel) to derive the equilibrium credit level for a panel of transition economies (in-sample panel). We opt for this (out-of-sample) approach because the coefficient estimates for transition economies are fairly unstable. We show that there is a large amount of uncertainty to determine the equilibrium level of private credit. Yet our results indicate that a number of countries are very close or even above the estimated equilibrium levels, whereas others are still well below the equilibrium level.
Subjects: 
credit growth
credit to the private sector
equilibrium level of credit
initial undershooting
Transition Economies
JEL: 
C31
C33
E44
G21
Document Type: 
Working Paper

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