Economic growth and bank credit: a causality analysis for Mexico
Abstract
The present analysis estimates the relation between the banking system and economic growth. Therefore, it considers the credit granted by banks to the private sector. With the aim of establishing (in order to establish) causal relations among the variables, autoregressive and cointegration vectors are developed. The results show that it prevails a causal link between the credit and total growth as well as a bidirectional interrelation of the latter with the consumption financing. Similarly (In the same way), it prevails a relation between the credit designated for consumption and the tertiary economic sector growth. For the other types of financing there are not statistically significant results, which point out that banking credit does not boost the development of the primary and secondary sectors of the economy.
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