The Association Between Bank Credit Terms and Conditions and the Business Cycle in the Euro Area
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The Association Between Bank Credit Terms and Conditions and the Business Cycle in the Euro Area
Anastasiou, Dimitrios | Drakos, Konstantinos
Applied Economics Quarterly, Vol. 65 (2019), Iss. 4 : pp. 247–256
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Anastasiou, Dimitrios; Athens University of Economics and Business
Drakos, Prof. Konstantinos; Department of Accounting and Finance, Athens University of Economics and Business, 76 Pattision Street, 10434, Athens, Greece. Tel.: +30 (210) 8203461
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Abstract
Abstract
We explored the trajectory of bank loan terms and conditions over the business cycle, where the latter was decomposed into its long-run (trend) and short-run (cyclical) components. We found that deterioration of each business cycle component leads to a significant tightening of credit terms and conditions. We found mixed results concerning the symmetry of impacts of the short and long run components. Symmetry was found between the terms and conditions on loans for small vs. large enterprises. Our findings provide very useful information to policy makers and should be taken into consideration when monetary policies are designed.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Dimitrios Anastasiou / Konstantinos Drakos: The Association Between Bank Credit Terms and Conditions and the Business Cycle in the Euro Area | 1 | ||
| Abstract | 1 | ||
| 1. Introduction | 1 | ||
| 2. Empirical Methodology | 2 | ||
| 3. Data Issues | 3 | ||
| 4. Results | 4 | ||
| 5. Conclusions | 9 | ||
| References | 9 |