Is There a Credit Crunch in the Czech Republic?

Is There a Credit Crunch in the Czech Republic?

Blog Article

We apply a disequilibrium model of credit demand and supply to test the credit crunch hypothesis.We suppose that Siemens WK14D321GB iQ300 Integrated Washer Dryer firms face credit rationing and a realised outstanding loan will be the minimum desired level of commercial bank loans and bank limit for the firm.We adopted the disequilibrium model which consists of credit supply and credit demand equations.We suggest that actual observed credit growth rate at time t lies on the supply curve (excess demand), or on the demand curve (excess supply), or on both (equilibrium).

Our model is estimated by the full-information maximum likelihood approach with a numerical maximization of the likelihood function.Our basic findings show that significant decrease in credits after the financial crisis in the year 2007 was caused by low economic and investment activity plug socket and reject the hypothesis that there is a credit crunch in the Czech Republic.