Looking for the Optimum Credit Burden as a Percentage of GDP so as to Minimize NPLs: A Panel Data Analysis in All Industrialized Countries

Abstract:     
The findings of the present paper hint that there is a limit on the burden of debt, thus suggesting that borrowers cannot afford a loan burden beyond a certain critical level. Perhaps, this critical level could be considered as the Achilles heel of the capitalism. It also hints that there is a conflict in economic policy: either borrowers will collapse or banks will collapse. The sample covers all industrialized countries. Data are taken from World Bank. The elaboration of these panel data is made feasible by means of the E-views software package.

Number of Pages in PDF File: 12

Keywords: Econometric models with panel data (single equation), Banking, Economic Growth, Capitalism, Unemployment, Stability of the Financial System, Equilibrium, Conflicts in Economic Policy, Optimization

JEL Classification: C23, E5, F43, P1, E24, E6

working papers series