Output Collapse in Eastern Europe : The Role of Credit

Author/Editor:

Guillermo Calvo ; Fabrizio Coricelli

Publication Date:

August 1, 1992

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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.

Series:

Working Paper No. 92/64

Notes:

Also published in Staff Papers, Vol. 40, No. 1, March 1993.

English

Publication Date:

August 1, 1992

ISBN/ISSN:

9781451848472/1018-5941

Stock No:

WPIEA0641992

Format:

Paper

Pages:

30

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