Credit extension in South Africa : a business cycle perspective for the period 1985 to 2009

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dc.contributor.author Fourie, Leila
dc.contributor.author Botha, Ilsé
dc.contributor.author Mears, Ronald
dc.date.accessioned 2012-10-09T07:15:11Z
dc.date.available 2012-10-09T07:15:11Z
dc.date.issued 2011
dc.identifier.citation Fourie, Leila, Botha, Ilsé. & Mears, Ronald. 2011. Credit extension in South Africa : a business cycle perspective for the period 1985 to 2009. African Journal of Business Management, 5(34):13074-13083 en_US
dc.identifier.issn 1993-8233
dc.identifier.uri http://hdl.handle.net/10210/7822
dc.description.abstract This paper investigates and quantifies the relationship between the macroeconomic business cycle and bank-granted credit in South Africa for the period 1985 to 2009. The main question that this research seeks to answer is what role do banks play in amplifying the business cycle and what is the impact of this on the macroeconomy? The outcomes of the econometric model support the hypothesis that a positive relationship exists between bank-extended credit and the business cycle. The vector autoregression technique was used to prove the relationship between credit and the underlying cycle. The analysis shows that a two-way relationship exists between credit and the coincident indicator, credit and insolvencies and credit and prime. Results from the vector error correction model show a significant short-run relationship of equilibrium in the cointegrating equation between credit and the coincident indicator. This corroborates the underlying theory that credit is a unifying variable that rapidly responds to shocks emanating from the dynamic interaction of cointegrating variables in the economy. en_US
dc.language.iso en en_US
dc.publisher African Journal of Business Management en_US
dc.rights African Journal of Business Management Vol. 5(34), pp. 13074-13083, 28 December, 2011 Available online at http://www.academicjournals.org/AJBM DOI: 10.5897/AJBM11.2200 ©2011 Academic Journals en_US
dc.subject Procyclicality en_US
dc.subject Cointegration en_US
dc.subject Structural vector autoregression (SVAR) en_US
dc.subject Vector autoregression (VAR) en_US
dc.subject Macroeconomic business cycle en_US
dc.subject Bank-granted credit en_US
dc.title Credit extension in South Africa : a business cycle perspective for the period 1985 to 2009 en_US
dc.type Article en_US

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