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Credit expansion – A study of the relation between bank lending and economic growth in Sweden

Åkerström, Viktor LU (2015) NEKN01 20151
Department of Economics
Abstract
A non-Granger causality test between bank lending and different economic performance measures represented by the real economy, real assets and the financial economy is conducted on Sweden. To capture for the effects of structural changes in the economy, a long period is analyzed (142 years) and two types of tests are made, one for the short- run and one for the long-run. The main findings are that the effect of bank lending on the measures has changed over time and that real asset prices and stock prices have surged since the financial crisis during the early 1990’s. This combined with expansionary monetary policy conducted by the central bank raises questions regarding the financial stability in Sweden. Similar studies performed on other... (More)
A non-Granger causality test between bank lending and different economic performance measures represented by the real economy, real assets and the financial economy is conducted on Sweden. To capture for the effects of structural changes in the economy, a long period is analyzed (142 years) and two types of tests are made, one for the short- run and one for the long-run. The main findings are that the effect of bank lending on the measures has changed over time and that real asset prices and stock prices have surged since the financial crisis during the early 1990’s. This combined with expansionary monetary policy conducted by the central bank raises questions regarding the financial stability in Sweden. Similar studies performed on other countries show that credit booms are important in shaping business cycles and also the danger of too high leveraging among households is stressed. (Less)
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author
Åkerström, Viktor LU
supervisor
organization
course
NEKN01 20151
year
type
H1 - Master's Degree (One Year)
subject
keywords
Bank lending, Economic growth, Financial stability, Granger causality test
language
English
id
7851283
date added to LUP
2015-09-15 12:36:50
date last changed
2015-09-15 12:36:50
@misc{7851283,
  abstract     = {A non-Granger causality test between bank lending and different economic performance measures represented by the real economy, real assets and the financial economy is conducted on Sweden. To capture for the effects of structural changes in the economy, a long period is analyzed (142 years) and two types of tests are made, one for the short- run and one for the long-run. The main findings are that the effect of bank lending on the measures has changed over time and that real asset prices and stock prices have surged since the financial crisis during the early 1990’s. This combined with expansionary monetary policy conducted by the central bank raises questions regarding the financial stability in Sweden. Similar studies performed on other countries show that credit booms are important in shaping business cycles and also the danger of too high leveraging among households is stressed.},
  author       = {Åkerström, Viktor},
  keyword      = {Bank lending,Economic growth,Financial stability,Granger causality test},
  language     = {eng},
  note         = {Student Paper},
  title        = {Credit expansion – A study of the relation between bank lending and economic growth in Sweden},
  year         = {2015},
}