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

12 Pages Posted: 3 Jan 2012 Last revised: 4 Jan 2012

Date Written: January 3, 2012

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.

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

Suggested Citation

Georgiou, Miltiades N., Looking for the Optimum Credit Burden as a Percentage of GDP so as to Minimize NPLs: A Panel Data Analysis in All Industrialized Countries (January 3, 2012). Available at SSRN: https://ssrn.com/abstract=1978822 or http://dx.doi.org/10.2139/ssrn.1978822

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