Identifying the transmission channels of credit supply shocks to household debt: Price and non-price effects

Varadi, Alexandra

doi:10.1016/j.euroecorev.2024.104747

European Economic Review

2024

DOI: 10.1016/j.euroecorev.2024.104747

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Identifying the transmission channels of credit supply shocks to household debt: Price and non-price effects

Alexandra Varadi

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2024

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Cited by 3 publications

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External Shocks, Asset Prices, and Credit Dynamics in Morocco: Insights from Disequilibrium Models

Kchikeche,

Mafamane

2024

ECO

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We investigate external shocks and asset price’s impact on the slowdown of business and household credit in Morocco using disequilibrium models. The results show that banks’ fly to quality, driven by a simultaneous decline in interest margins and borrower creditworthiness, is a key factor behind the slowdown of credit supply. On the demand side, slower growth and saturated housing demand have contributed to reduced borrowing and repayment capacity of borrowers. Furthermore, external shocks are transmitted to credit supply through foreign deposits and households’ credit demand through remittances. Additionally, stocks and residential real estate asset prices are closely tied to credit demand. These findings suggest that addressing bank credit barriers could stimulate economic growth. To do so, policymakers may consider employing unconventional monetary policy tools to effectively manage the transmission channels of external shocks and asset prices to bank credit dynamics.

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External Shocks, Asset Prices, and Credit Dynamics in Morocco: Insights from Disequilibrium Models

Kchikeche,

Mafamane

2024

ECO

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External Shocks, Asset Prices, and Bank Credit Slowdown in Morocco: an Empirical Investigation Into the Supply Versus Demand Puzzle

KCHIKECHE,

MAFAMANE

2024

SSRN Journal

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The Mathematical Simulation of South Korea’s Financial and Economic Impacts from Real Estate Bubbles: Lessons from the China Evergrande Collapse

Wang,

2024

Mathematics

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This study investigates the macroeconomic and financial repercussions of a real estate bubble burst in South Korea through the application of Bayesian estimation and impulse response function analysis. By utilizing this approach tailored to the specific economic conditions of South Korea, the research effectively captures the complex ripple effects across a range of financial and macroeconomic variables. The results demonstrate that a real estate bubble burst markedly increases financial market risks, leading to heightened liquidity demands within the banking sector and necessitating adjustments in both deposit rates and bond yields. The study also emphasizes the differentiated impacts on patient and impatient households, where wealth losses drive significant shifts in consumption and labor supply behaviors, further constrained by prevailing labor market conditions. Additionally, the broader economic implications are examined, revealing the adverse effects on corporate output and investment, as well as the dynamics of international capital flows that impact foreign exchange reserves and exchange rates. These findings highlight the urgent need for proactive monitoring and policy interventions to mitigate the detrimental effects of real estate bubbles, ensuring financial stability and fostering sustainable economic growth in South Korea.

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Identifying the transmission channels of credit supply shocks to household debt: Price and non-price effects

Cited by 3 publications

References 36 publications

External Shocks, Asset Prices, and Credit Dynamics in Morocco: Insights from Disequilibrium Models

External Shocks, Asset Prices, and Credit Dynamics in Morocco: Insights from Disequilibrium Models

External Shocks, Asset Prices, and Bank Credit Slowdown in Morocco: an Empirical Investigation Into the Supply Versus Demand Puzzle

The Mathematical Simulation of South Korea’s Financial and Economic Impacts from Real Estate Bubbles: Lessons from the China Evergrande Collapse

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