In the following paper it will be a further examination between the economic growth which represented by GDP, with inflation and gross capital formation. In the first sector it will be a literature review in which will be demonstrated the academic findings about the relationship of the variables. In the second part there are empirical tests which have been made with the use of the E-views program in order to test the relationship of the variables. To conclude, there is a comparison between the academic findings and the empirical findings.
To continue with, in the following text will be examined how the population growth rate and inflation can affect the bank credit. It is also easily understood that there are and many other factors that should be taken into account before to be able to conclude whether the inflation and population growth rate have a positive or negative impact on the bank credit. Further, there are plenty factors that can influence the bank credit such as interest rates, banking regulations, especially after the economic crisis of 2008, retail banking, etc. In this project will be examined how these variables interact in the example of the United States of America. The data that will be used are from 32 observations, more precisely from the year 1984 to 2015.
Table of Contents
1. Introduction
2. Literature Review
3. Theoretical Model and Data Description
4. Economic Results and Interpretation
5. Conclusion
6. References
Objectives and Research Themes
This project aims to investigate the quantitative relationship between inflation, population growth, and bank credit within the United States, utilizing econometric modeling to analyze data spanning from 1984 to 2015. By applying the Ordinary Least Squares (OLS) method and conducting various diagnostic tests, the study evaluates how these macroeconomic factors influence credit availability, particularly in the context of the 2008 financial crisis.
- Econometric analysis of the impact of inflation on bank credit
- Examination of the relationship between population growth and financial variables
- Evaluation of the United States banking sector post-2008
- Application of statistical tests (OLS, Ramsey RESET, White Test, BPG Test)
- Assessment of structural breaks in economic data
Excerpt from the Book
Theoretical Model and Data Description
To continue with, as it mentioned in the previous paragraphs the topic of this particular project will examine the inflation and population growth rate compared to bank credit. To be more specific, the research focuses the relationship of these variables in the case of the United States of America. The independent variables are the inflation and population growth, while the depend variable is the bank credit. In addition, in order to be more reliable the results and not biased, it will be examined results from 32 observations and more precisely from 1984 to 2015. The data for the research have been taken from the Federal Reserve Bank of St. Louis one of the 12 regional Reserve Banks in United States.
Summary of Chapters
Introduction: This chapter defines the role of econometrics and outlines the research objective, which is to analyze how inflation and population growth influence bank credit in the USA between 1984 and 2015.
Literature Review: This section provides a conceptual framework by defining bank credit and its evolution following the 2008 financial crisis, while also discussing the theoretical links between inflation, population dynamics, and economic activity.
Theoretical Model and Data Description: This chapter specifies the research focus, identifying inflation and population growth as independent variables affecting bank credit, and details the source and scope of the 32 annual observations used for the analysis.
Economic Results and Interpretation: This section presents the OLS regression results and performs comprehensive diagnostic testing, including T-statistics, F-statistics, the Ramsey RESET test, and heteroskedasticity tests to validate the model's robustness.
Conclusion: This final chapter synthesizes the findings, confirming a positive relationship between the chosen variables and bank credit, while noting a significant structural break in the data associated with the 2008 financial crisis.
References: This section lists the academic and institutional sources cited throughout the project.
Keywords
Econometrics, Bank Credit, Inflation, Population Growth, United States, OLS Method, Financial Crisis 2008, Structural Break, Heteroskedasticity, Ramsey RESET Test, Monetary Policy, Statistical Modeling, Regression Analysis, Economic Variables, Data Analysis
Frequently Asked Questions
What is the primary focus of this research paper?
The paper examines the quantitative relationship between inflation, population growth, and bank credit in the United States using econometric tools.
What are the central thematic areas covered in the study?
The study centers on banking credit dynamics, macroeconomic indicators like inflation and population growth, and the statistical evaluation of these relationships.
What is the main objective or research question of the work?
The goal is to determine whether inflation and population growth have a statistically significant positive or negative impact on bank credit volumes.
Which scientific methods are employed for the analysis?
The author uses the Ordinary Least Squares (OLS) method, supplemented by diagnostic tests such as the White Test, BPG Test, Ramsey RESET Test, and Chow Breakpoint Test.
What does the main part of the paper discuss?
The main part encompasses the literature review, the description of the theoretical model and data, and the detailed interpretation of the econometric results.
Which keywords best characterize the work?
The key themes are Econometrics, Bank Credit, Inflation, Population Growth, OLS, and Financial Crisis analysis.
Why was the 2008 financial crisis included in the analysis?
The crisis served as a critical point for visual inspection of the data, revealing a sharp decline in inflation and bank credit that necessitated a structural break analysis.
What was the outcome of the Chow Breakpoint Test?
The test results (prob=0.0069) indicated a significant break in the data at the time of the financial crisis, suggesting that a dummy variable is required for a more accurate analysis.
How does the author interpret the relationship between the variables?
The results show that both inflation and population growth have a positive relationship with bank credit, with population growth exhibiting a stronger influence.
- Citation du texte
- Asterios Strantaris (Auteur), 2018, Bank Credits. The Effects of Inflation and Population Growth, Munich, GRIN Verlag, https://www.grin.com/document/510995
