Policies aimed at financial sector deepening and increasing access to credit are of essence to enhancing economic performance. However, the magnitude of the impact is smaller once factors such as the labour employed and past economic performance of the sectors are taken into account. We find a positive and significant impact of credit on sectoral gross domestic product measured as real value added. This paper investigates the impact of access to bank credit on the economic performance of key economic sectors using sectoral panel data for Kenya. Overall, our results imply that credit market shocks have contributed significantly to US economic fluctuations during the 1990–2008 period.Despite the growing literature on financial development-economic growth nexus, there is paucity of empirical studies that explore the impact of access to credit and economic performance at the sectoral country level, as an increasing number of studies largely focus on cross-country analyses. Traders and small entrepreneurs need credit for their needs.
Farmers avail credit during monsoons for buying seeds, agricultural input and other expenses. Chapter: 9th Social Science : Economics: Money and Credit. At times the voice of the author felt seamlessly integrated with that of Douglas’s. It is a narrative firmly grounded in the concepts of C H Douglas with plenty of key quotes on almost every page. Indeed, shocks emanating from the corporate bond market account for more than 30 percent of the forecast error variance in economic activity at the two- to four-year horizon. Economics - Credit 9th Social Science : Economics: Money and Credit. Social Credit Economics is an extraordinary analysis that can be both technical and philosophical but is always well explained. Across the next 12 months, we estimate that the. New jobs in counties with less economic distress earn lower credits. Recently expanded as part of the American Rescue Plan of 2021, this report derives novel estimates of the total benefit and likely economic impact of the credit across the fifty states. Georgias Job Tax Credit has been in place for 25 years the Quality Jobs Tax. According to impulse responses from a structural factor-augmented vector autoregression, unexpected increases in bond spreads cause large and persistent contractions in economic activity. The Child Tax Credit provides tax relief and income support to families in the form of an advanced tax refund. Much of the predictive power of bond spreads for economic activity is embedded in securities issued by intermediate-risk rather than high-risk firms. Our portfolio-based bond spreads contain substantial predictive power for economic activity and outperform-especially at longer horizons-standard default-risk indicators.
An advantage of our “ground-up” approach is that we are able to construct matched portfolios of equity returns, which allows us to examine the information content of bond spreads that is orthogonal to the information contained in stock prices of the same set of firms, as well as in macroeconomic variables measuring economic activity, inflation, interest rates, and other financial indicators. We re-examine this evidence using a broad array of credit spreads constructed directly from the secondary bond prices on outstanding senior unsecured debt issued by a large panel of nonfinancial firms.
To identify disruptions in credit markets, research on the role of asset prices in economic fluctuations has focused on the information content of various corporate credit spreads.
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