|Appears in Collections:||Economics Journal Articles|
|Peer Review Status:||Refereed|
|Title:||More Mortgages, Lower Growth?|
dynamic panel analysis
|Citation:||Bezemer D, Grydaki M & Zhang L (2016) More Mortgages, Lower Growth?, Economic Inquiry, 54 (1), pp. 652-674.|
|Abstract:||In newly collected data on 46 economies over 1990-2011, we show that financial development since 1990 was mostly due to growth in credit to real estate and other asset markets, which has a negative growth coefficient. We also distinguish between growth effects of stocks and flows of credit. We find positive growth effects for credit flows to nonfinancial business but not for mortgage and other asset market credit flows. By accounting for the composition of credit stocks and for the effect of credit flows, we explain the insignificant or negative growth effects of financial development in recent times. What was true in the 1960s, 1970s and 1980s when the field of empirical credit-growth studies blossomed, is no longer true in the 1990s and 2000s. New bank lending is not primarily to nonfinancial business and financial development may no longer be good for growth. These trends predate the 2008 crisis. They prompt a rethink of the role of banks in the process of economic growth.|
|Rights:||This item has been embargoed for a period. During the embargo please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study. This is the peer reviewed version of the following article: Bezemer, D., Grydaki, M. and Zhang, L. (2016), MORE MORTGAGES, LOWER GROWTH?. Economic Inquiry, 54: 652–674. doi: 10.1111/ecin.12254, which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1111/ecin.12254/abstract. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.|
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