Convergence in Household Credit Demand Across Euro Area Countries: Evidence from Panel Data
40 Pages Posted: 26 Oct 2010
Date Written: October 1, 2006
Abstract
The paper contributes to the literature on the convergence of financial systems in the euro area by estimating household credit demand in individual countries. Using the ARDL framework advocated notably by Pesaran et al. (1999), the paper provides evidence on the convergence of long run credit demand determinants (interest rates, investment and house prices) among the largest euro area countries, while short run dynamics remain heterogenous across countries. The paper also demonstrates that the equation uncovers demand rather than supply behaviour.
Keywords: Credit Demand, Panel Cointegration, Households, Bank Profitability
JEL Classification: E51, C31, C32, C33
Suggested Citation: Suggested Citation
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