Dynamic interaction between inflation and credit Rationing: the case of Nigeria
Article Metrics Report
Views, downloads, citations, engagementCited by
Current citation countResearch summary
This study examines the dynamic interaction between inflation and credit rationing in the case of Nigeria for the period 1970-2011. It uses time-series data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin in its analysis of examining the long run and causal relationship between inflation and credit rationing. In doing so, it employs the Autoregressive Distributed Lag (ARDL) bounds testing procedure suggested by Pesaran et al. (2001) and the Granger causality test suggested by Toda and Yamamoto (1995). Empirical findings reveal that although there is an evidence of a long run relationship between credit rationing and inflation, no pattern of such long run relationship is established. The results reveal further that there is no evidence of causality in either direction between inflation and credit rationing in Nigeria. Consequently, the study recommends, among other policy implications, that financial reforms may be pursued without adversely affecting the purchasing power of the citizenry.
Article History
How to Cite
Y, A. E., A, S. K., & O, M. P.. (2015). Dynamic interaction between inflation and credit Rationing: the case of Nigeria. International Journal of Business and Economic Development, Volume 03 Issue 2.
Citation Context
APA
Y, A. E., A, S. K., & O, M. P.. (2015). Dynamic interaction between inflation and credit Rationing: the case of Nigeria. International Journal of Business and Economic Development, Volume 03 Issue 2.
MLA
Y, Akinkoye Ebenezer, et al.. "Dynamic interaction between inflation and credit Rationing: the case of Nigeria." International Journal of Business and Economic Development, Volume 03 Issue 2, 2015.
Chicago
Akinkoye Ebenezer Y, Sanusi Kazeem A, and Moses Peter O. "Dynamic interaction between inflation and credit Rationing: the case of Nigeria." International Journal of Business and Economic Development Volume 03 Issue 2 (03 Sep 2015).
Harvard
Y, A. E., A, S. K., & O, M. P. (2015) Dynamic interaction between inflation and credit Rationing: the case of Nigeria. International Journal of Business and Economic Development, Volume 03 Issue 2
References
- Berger, A. N., and Udell, G. F. (1992). Some Evidence on the Empirical Significance of Credit Rationing. University of South Carolina Faculty Publications.
- Boyd, J. H., Levine, R., Smith, B. D. (2000). The Impact of Inflation on Financial Sector Performance. Journal of Economic Literature.
- Craigwell, R., and Kaidou-Jeffery, D. (2010). Lending Behavior and Credit Rationing in Barbados: A Regime Switching Model. Central Bank of Barbados Working Paper.
- Driscoll, M. (1991). Deregulation, Credit Rationing, Financial Fragility and Economic Performance. Organization for Economic Co-operation and Development, Department of Economics and Statistics Working Papers, No. 97.
- Druck, P., and Garibaldi, P. (2000). Inflation Risk and Portfolio Allocation in the Banking System.
- GAO, Q., GU, J., Hernandez-Verme, P. (2012). A Semiparametric Time Trend Varying Coefficients Model: With an Application to Evaluate Credit Rationing in U.S. Credit Market. Annals of Economics and Finance, 13-1, 195-216.
- Giles, D. (1997). Causality between the Measured and Underground Economics in New Zealand. Applied economics Letters, 4, 63-7.
- Huybens, E., and Smith, B. (1999). Inflation, Financial Markets and Long-run Real Activity. Journal of Monetary Economics, 43, 283-315.
- Keho, Y. (2009). Inflation and Financial Development: Cointegration and Causality Analysis for the UEMOA Countries. International Research Journal of Finance and Economics, 27, 118-123.
- Lee, C., and Wong, S. Y. (2005). Inflationary Threshold Effects in the Relationship between Financial Development and Economic Growth: Evidence from Taiwan and Japan. Journal of Economic Development, 30(1), 49-68.
- Mavrotas, G., and Kelly, R. (2001). Old Wine in New Bottles: Testing causality between Savings and Growth. The Manchester School, 69, 97-105.
- Mendicino, C. (2011). Credit Rationing in Business Cyles.
- Pesaran, H. M., and Shin, Y., Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationship. Journal of Applied Econometrics, 16, 289-326.
- Rousseau, P. L., and Wachtel, P. (2002). Inflation Thresholds and the Finance-Growth Nexus. Journal of International Money and Finance, Elsevier, 21(6), 777-793.
- Wahid, A. N. M., Shahbaz, M., and Azim, P. (2011). Inflation and Financial Sector Correlation: The Case of Bangladesh. International Journal of Economics and Financial Issues, 1(4), 145-152.
- Yigit, T. M. (2002). Effects of Inflation Uncertainty on Credit Markets: A Disequilibrium Approach. Journal of Economic Literature.