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Business Cycle in Czechoslovakia Under Central Planning: Were Credit Shocks Causing it?
Author:
Mr. Ales Bulir
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Series:
IMF Working Papers
Volume/Issue:
Volume 1996: Issue 129
Language:
English
Publication Date:
01 Nov 1996
DOI:
https://doi.org/10.5089/9781451934755.001
ISBN:
9781451934755
ISSN:
1018-5941
Pages:
28
Keywords:
WP; production; investment; investment credit; firm; credit shock; credit supply; credit view; credits Granger-causing; supply effect; Credit; Industrial production; Bank credit; Business cycles; Vector autoregression; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines credit origins of the business cycle in the former Czechoslovakia. Industrial production is found to be cointegrated with various measures of bank credit during 1976-90 and it is shown that noninvestment credits are Granger-causing industrial production and that a feedback relation exists between investment credits and industrial production. Although the potency of credit supply shocks to industrial production has been changing, production decline (growth) seems to follow credit tightening (loosening). However, the paper confirms that credit shocks were only a minor part of the output decline in 1989-90.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund