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Bank lending, macroeconomic conditions and financial uncertainty: evidence from Malaysia

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dc.contributor.authorMohamed Eskandar Shah Mohd Rasid
dc.contributor.authorMansor H. Ibrahim
dc.date.accessioned2016-06-06
dc.date.accessioned2016-07-25T20:05:48Z
dc.date.available2016-06-06
dc.date.available2016-07-25T20:05:48Z
dc.date.disclosure2016-06-10
dc.date.issued2012
dc.description.abstractIn this paper, we examine the interrelations between bank lending, macroeconomic conditions and financial uncertainty for an emerging economy, Malaysia. Adopting time series techniques of cointegration, causality and vector autoregressions (VARs), we arrive at the following main results. We note long run positive relations between real output and both real bank credits and real stock prices. However, with slow adjustment of real output in responses to credit expansion or stock price increase and weak exogeneity of the latter two variables, both credits and stock prices can be persistently higher than their fundamental values. The phenomenon can be detrimental since it heightens market uncertainty. Our results suggest that heightened market uncertainty is negatively related to output in the long run and, on the basis of dynamics analysis, it is likely to depress real output, real credit and real stock prices. At the same time, we note significant dynamic impacts of interest rate shocks on other variables. Taken together, these results have important implications for macroeconomic performance and stability for the case of Malaysi
dc.identifier.citationIbrahim, M. H. & Mohd Rasid, M. E. S. (2012). Bank lending, macroeconomic conditions and financial uncertainty: evidence from Malaysia. Review of Development Finance, 2 (3-4), pp. 156-164.
dc.identifier.doihttps://doi.org/10.1016/j.rdf.2012.09.001
dc.identifier.urihttps://ikr.inceif.edu.my/handle/INCEIF/1424
dc.languageEnglish
dc.language.isoeng
dc.publisherElsevier
dc.rights2012. Elsevier
dc.sourceCRP
dc.subjectBank credits
dc.subjectFinancial uncertainty
dc.subjectMacroeconomy
dc.subjectTime series
dc.subjectMalaysia
dc.titleBank lending, macroeconomic conditions and financial uncertainty: evidence from Malaysia
dc.typeJournal Article
dlc.maintopicConventional finance
dlc.subtopicBanking
dspace.entity.typePublication
ikr.doctypeScholarly Works
ikr.topic.maintopicConventional finance
ikr.topic.subtopicConventional finance
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