{
  "title": "Business Cycle in Czechoslovakia Under Central Planning: Were Credit Shocks Causing it?",
  "publication": "IMF Working Papers, November 1, 1996",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/business-cycle-in-czechoslovakia-under-central-planning-were-credit-shocks-causing-it-1954",
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  "summary": "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 relati",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Industrial production is found to be cointegrated with various measures of bank credit during 1976-90.\n- Noninvestment credits are Granger-causing industrial production.\n- A feedback relation exists between investment credits and industrial production.\n- Production decline (growth) seems to follow credit tightening (loosening).\n- Credit shocks were only a minor part of the output decline in 1989-90."
    },
    {
      "heading": "Econometric approach and evidence",
      "content": "- Time period analyzed: 1976-90.\n- Techniques referenced: cointegration analysis and Granger-causality tests.\n- Main variables examined: industrial production, noninvestment credits, investment credits, various measures of bank credit.\n- Dynamic relation: potency of credit supply shocks to industrial production changed over the sample; evidence of both causation (noninvestment credits → industrial production) and feedback (investment credits ↔ industrial production)."
    },
    {
      "heading": "Interpretation and implications",
      "content": "- The \"credit view\" receives empirical support insofar as credit tightening is followed by production declines and credit loosening is followed by production growth.\n- Despite the credit–production links, credit shocks account for only a small portion of the sharp output decline observed in 1989-90, implying other factors were predominant in that episode."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Author: Ales Bulir\n- Date: November 1, 1996\n- Series: Working Paper No. 1996/129\n- Issue: 129\n- Volume: 1996\n- Pages: 28\n- DOI: https://doi.org/10.5089/9781451934755.001\n- Stock No: WPIEA1291996\n- ISBN: 9781451934755\n- ISSN: 1018-5941\n- Subjects/keywords: Bank credit; Business cycles; Credit; Econometric analysis; Economic growth; Industrial production; Money; Production; Vector autoregression; credit shock; credit supply; credits Granger-causing; investment credit; supply effect; WP\n\nSource: IMF Working Paper — \"Business Cycle in Czechoslovakia Under Central Planning: Were Credit Shocks Causing it?\" by Ales Bulir, Working Paper No. 1996/129 (November 1, 1996).\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/business-cycle-in-czechoslovakia-under-central-planning-were-credit-shocks-causing-it-1954"
    }
  ],
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    "[Markdown version](/en/publications/wp/issues/2016/12/30/business-cycle-in-czechoslovakia-under-central-planning-were-credit-shocks-causing-it-1954/index.md)",
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    "Authors: Aleš Bulíř",
    "Published: November 1, 1996",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451934755.001",
    "Industrial production is found to be cointegrated with various measures of bank credit during 1976-90.",
    "Noninvestment credits are Granger-causing industrial production.",
    "A feedback relation exists between investment credits and industrial production.",
    "Production decline (growth) seems to follow credit tightening (loosening).",
    "Credit shocks were only a minor part of the output decline in 1989-90.",
    "Time period analyzed: 1976-90.",
    "Techniques referenced: cointegration analysis and Granger-causality tests.",
    "Main variables examined: industrial production, noninvestment credits, investment credits, various measures of bank credit.",
    "Dynamic relation: potency of credit supply shocks to industrial production changed over the sample; evidence of both causation (noninvestment credits → industrial production) and feedback (investment credits ↔ industrial production).",
    "The \"credit view\" receives empirical support insofar as credit tightening is followed by production declines and credit loosening is followed by production growth.",
    "Despite the credit–production links, credit shocks account for only a small portion of the sharp output decline observed in 1989-90, implying other factors were predominant in that episode.",
    "Author: Ales Bulir",
    "Date: November 1, 1996",
    "Series: Working Paper No. 1996/129",
    "Issue: 129",
    "Volume: 1996",
    "Pages: 28",
    "DOI: https://doi.org/10.5089/9781451934755.001",
    "Stock No: WPIEA1291996",
    "ISBN: 9781451934755",
    "ISSN: 1018-5941",
    "Subjects/keywords: Bank credit; Business cycles; Credit; Econometric analysis; Economic growth; Industrial production; Money; Production; Vector autoregression; credit shock; credit supply; credits Granger-causing; investment credit; supply effect; WP"
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