Theoretical and Applied Economics
No. 2 / 2020 (623), Summer
Impact of credit guarantee on the output gap: A panel data analysis of Asian sovereigns
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), Mumbai, India
Abstract. This paper aims to assess the impact of financial variables on output gap in a group of middle-income Asian countries such as India, Indonesia, Republic of Korea, Malaysia, and Thailand. In order to improve on the previous methodologies, this study followed a different approach by considering a binary nature of dependent variable. In order to explore role of credit guarantee, this paper considered credit guarantee to credit offtake ratio as an explanatory variable in defining output gap. Moreover, in order to get a clear picture on influence of monetary and fiscal policy, we have included revenue deficit and debt to GDP ratio along with real interest rate and inflation rate. Our Probit model ultimately proves that credit guarantee is an important factor for identifying output gap. Additionally, output gap is found to be neutral towards the movement of other financial variables.
Contents
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Banking Sector Reforms and the Goals of Nationalised Commercial Banks in India
Determinants of economic growth in India: A time series perspective
Impact of credit guarantee on the output gap: A panel data analysis of Asian sovereigns
Analyzing the robustness of ARIMA and neural networks as a predictive model of crude oil prices
Does the agriculture value-added contribute to the economic growth in 30 African countries?