scholarly journals How strong is the case for dollarization in Central America? An empirical analysis of business cycles, credit market imperfections and the exchange rate

2011 ◽  
Vol 17 (2) ◽  
pp. 147-166 ◽  
Author(s):  
Nannette Lindenberg ◽  
Frank Westermann
Keyword(s):  
Exchange Rate ◽  
Business Cycles ◽  
Central America ◽  
Empirical Analysis ◽  
Credit Market ◽  
Market Imperfections ◽  
Credit Market Imperfections ◽  
The Exchange Rate

Non-Performing Loans, Banking System and Macroeconomy

2018 ◽  
Vol 63 (2) ◽  
pp. 67-86
Author(s):  
Akinola Morakinyo ◽  
Colette Muller ◽  
Mabutho Sibanda
Keyword(s):  
Exchange Rate ◽  
Serial Correlation ◽  
Banking System ◽  
Impulse Response Function ◽  
Credit Market ◽  
Variance Decomposition ◽  
Structural Var ◽  
Long Run ◽  
Correlation Tests ◽  
The Exchange Rate

Abstract The study builds on previous studies of the consequences of non-performing loans on an economy. Using a seven-by-seven matrix in the impulse response function (IRF) of the structural autoregressive model, we find a long-run impact of an impulse to non-performing loans on the banking system and the macroeconomy in Nigeria. Conversely, non-performing loans also respond to the innovation of all macro-banking variables aside from the exchange rate and the growth rate to GDP. Also, the level of non-performing loans grows in influence in relation to the changes to the exchange rate using the variance decomposition tool of Structural VAR. Hence, a prominent role is assigned to the level of NPLs in linking the friction in the credit market to the susceptibility of both the banking system and the macroeconomy. This study passes the serial correlation tests and the three tests of normality.

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