On the Latin American Credit Drivers |
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Authors: | Paulo Rogério Faustino Matos |
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Institution: | Graduate Program in Economics, Federal University of Ceará, Fortaleza, Ceará, Brazil |
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Abstract: | We add to the literature about credit in Latin America by assessing what has been driving the recent and heterogeneous expansion of credit to gross domestic product based on supply and demand variables. We chose working with these emerging economies due to the low levels of human capital, the divergent patterns of evolution of economic variables and the vulnerability of credit expansion. According to balanced panel estimations, our main findings in terms of public policy suggest that credit reflects a financial deepening characterized by a higher bank concentration and by a policy able to stimulate saving even practicing lower deposit interest rates. |
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Keywords: | Credit to GDP in Latin America bank deposits to GDP bank concentration real deposit interest rate |
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