Template-Type: ReDIF-Article 1.0
Author-Name: Katalin Bodnár
Author-Name: Zsolt Kovalszky
Author-Name: Emese Hudák
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: bodnark@mnb.hu
Title: Recovery from crises and lending
Abstract: During the recovery from the recent crisis, the general role of lending in economic growth,
and particularly in the recovery from financial crises, has become an important issue. In this
paper, we review the major differences between creditless recovery episodes and recoveries
accompanied by growth of credit. Based on the literature, we find that creditless recoveries
are relatively frequent phenomena: a quarter or one-fifth of all real economy recoveries
take place without the growth of credit. The rate of economic growth is permanently
lower during creditless recoveries than in episodes accompanied by credit expansion. Thus,
lending activity of the financial intermediary system is usually necessary for fast recovery.
When analysing the recovery from the current crisis, we find that a number of factors exist
that predispose to creditless recovery. The current growth, the rate of which is lower than
before the crisis, is taking place – both in the Member States of the European Union and
in Hungary – with a decrease or stagnation of the credit stock. In the medium and long
term, it is essential for the sustained growth of the real economy that loans granted by
the financial intermediary system once again start to increase.
Classification-JEL: E32, G01, O40
Keywords: economic growth, financial crises, recovery, lending, Hungary
Journal: Financial and Economic Review 
Pages: 57-85
Volume: 13
Issue: 4
Year: 2014
File-URL: http://english.hitelintezetiszemle.hu/letoltes/3-bodnar-en.pdf
Handle: RePEc:mnb:finrev:v:13:y:2014:i:4:p:57-85