Output Collapse in Eastern Europe: The Role of Credit
August 1, 1992
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Summary
Real bank credit in Eastern European countries after their recent stabilization programs is shown to have fallen sharply, except in the case of Hungary. The meaning of the fall is discussed under the present value and liquidity perspectives. Moreover, it is shown that the hypothesis that output contraction may be partly due to credit contraction cannot be ruled out. The hypothesis is tested on a sample of 85 branches of industry in Poland. The rationale for expecting a connection between credit and output and policy options to attenuate the liquidity crunch in post-socialist economies is also subject to analysis.
Subject: Asset and liability management, Bank credit, Banking, Credit, Credit booms, Credit ceilings, Liquidity, Monetary expansion, Money
Keywords: above-mentioned firm, Bank credit, Credit, Credit booms, Credit ceilings, credit market, Eastern Europe, enterprise credit, enterprise liquidity, lending firm, Liquidity, output credit elasticity, WP
Pages:
30
Volume:
1992
DOI:
Issue:
064
Series:
Working Paper No. 1992/064
Stock No:
WPIEA0641992
ISBN:
9781451848472
ISSN:
1018-5941
Notes
Also published in Staff Papers, Vol. 40, No. 1, March 1993.
