Public Finance Quarterly Archive Articles

An Empirical Analysis of the Relationship between Economic Growth and Credit Volumes in Hungary

10:25, december 12, 2019.
József Varga
Habil. Associate Professor,
Institute of Finance and Accounting, Kaposvár University,
Department of Finance, Faculty of Economic Sciences
Corvinus University of Budapest

Elbegdorj Temuulen

Tibor Bareith
Assistant Lecturer,
Institute of Finance and Accounting, Faculty of Economic Science,
Kaposvár University

Published in: Public Finance Quarterly 2019/4. (p. 455-470.)

Summary: Our research focuses on the impact of the private sector’s credit volume on economic growth. The main purpose of our study is to present the theoretical background between lending activity and economic growth, which is empirically tested for Hungary in 2000-2017. We have used the Vector Autoregression model, where the dependent variable is a linear function of past lags of itself and past lags of the other involved variables. We have identified a significant relationship between private sector credit and general government debt and the pace of economic growth. Based on our empirical research, the base effect, Germany’s economic growth and recession were significant variables.

Key words: economic growth, lending, Hungary

JEL code: E42, E44, G20


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