{
  "title": "Nonperforming Loans and Macrofinancial Vulnerabilities in Advanced Economies",
  "publication": "IMF Working Papers, July 1, 2011",
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  "summary": "We analyze the link between nonperforming loans (NPL) and macroeconomic performance using two complementary approaches. First, we investigate the macroeconomic determinants of NPL in panel regressions and confirm that adverse macroeconomic developments are associated with rising NPL.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Title: Nonperforming Loans and Macrofinancial Vulnerabilities in Advanced Economies\n- Author: Mwanza Nkusu\n- Publication date: July 1, 2011\n- Series: Working Paper No. 2011/161\n- Pages: 27\n- DOI: https://doi.org/10.5089/9781455297740.001\n- Core conclusion: A sharp increase in nonperforming loans (NPL) triggers long-lived tailwinds that cripple macroeconomic performance from several fronts."
    },
    {
      "heading": "Analytical approaches",
      "content": "- Two complementary empirical approaches are applied:\n  - Panel regressions to investigate macroeconomic determinants of NPL and confirm that adverse macroeconomic developments are associated with rising NPL.\n  - Panel vector autoregressive (PVAR) model to investigate feedback between NPL and its macroeconomic determinants; impulse response functions (IRFs) highlight NPL's central role in linkages between credit market frictions and macrofinancial vulnerability."
    },
    {
      "heading": "Key findings and dynamics",
      "content": "- Adverse macroeconomic developments are associated with rising NPL (established via panel regressions).\n- IRFs from the PVAR model attribute a central role to NPL in the linkages between credit market frictions and macrofinancial vulnerability.\n- A sharp increase in NPL leads to long-lived adverse effects on macroeconomic performance across multiple channels."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Credit, Financial institutions, Financial statements, Housing prices, Loans, Money, Nonperforming loans, Prices, Public financial management (PFM)\n- Keywords: asset quality, Banks, business fluctuations, Credit, Financial statements, Global, higher-than-expected NPL ratio, Housing prices, Loans, macrofinancial linkages, modeling NPL, nonperforming loans, NPL, NPL dynamics, NPL increase, NPL measure, NPL time series, price, unemployment, WP\n\n---\n\n Content in this bundle\n\n- wp11161\n  - wp11161 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp11161 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/nonperforming-loans-and-macrofinancial-vulnerabilities-in-advanced-economies-25026"
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    "Authors: Mwanza Nkusu",
    "Published: July 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781455297740.001",
    "Title: Nonperforming Loans and Macrofinancial Vulnerabilities in Advanced Economies",
    "Author: Mwanza Nkusu",
    "Publication date: July 1, 2011",
    "Series: Working Paper No. 2011/161",
    "Pages: 27",
    "DOI: https://doi.org/10.5089/9781455297740.001",
    "Core conclusion: A sharp increase in nonperforming loans (NPL) triggers long-lived tailwinds that cripple macroeconomic performance from several fronts.",
    "Two complementary empirical approaches are applied:",
    "Adverse macroeconomic developments are associated with rising NPL (established via panel regressions).",
    "IRFs from the PVAR model attribute a central role to NPL in the linkages between credit market frictions and macrofinancial vulnerability.",
    "A sharp increase in NPL leads to long-lived adverse effects on macroeconomic performance across multiple channels.",
    "Subject: Credit, Financial institutions, Financial statements, Housing prices, Loans, Money, Nonperforming loans, Prices, Public financial management (PFM)",
    "Keywords: asset quality, Banks, business fluctuations, Credit, Financial statements, Global, higher-than-expected NPL ratio, Housing prices, Loans, macrofinancial linkages, modeling NPL, nonperforming loans, NPL, NPL dynamics, NPL increase, NPL measure, NPL time series, price, unemployment, WP",
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