What Drives Credit Growth in Emerging Asia?

Fei Han, Selim Elekdag
2012 IMF Working Papers  
This paper seeks to uncover the main drivers of credit growth in emerging Asia using a multi-country structural vector autoregressive (SVAR) model. Taking a novel approach, we developed a two-block SVAR whereby shocks within blocks are identified using sign restrictions, whereas shocks across the blocks are identified using a recursive (block-) Cholesky structure. We find that domestic factors are more dominant than external factors in driving rapid credit growth in emerging Asia. This is
more » ... ularly true for domestic monetary policy, which can play a pivotal role in terms of managing rapid credit growth in emerging Asia.
doi:10.5089/9781463936440.001 fatcat:jgfkhimonvfcldux72lrj6t46m