Economic cycle and credit volume interaction: case of Lithuania ; Ekonominio ciklo ir kredito apimties sąveikos tyrimas Lietuvoje

Abstract

Economic (sometimes called "business") cycle research is one of the most popular topics of scientific literature discussions over the last years encompassing global economy long-term grow and recession starting from 2007. Such cycles can also be observed in banking activities – decreasing crediting volumes can be noticed in the majority of countries. However, the interaction between financial and business cycles is not fully revealed and differs in different countries. In the case of Lithuania credit volume and business activeness cyclic interaction can be also named as specific, reflected in gross domestic product (GDP) and credit volume fluctuations. Based on various economic cycle stages identification methodologies, not every single fluctuations can be assigned as an economic cycle stage: some of them are not identified as significant and are not recognised as economic cycles, the others match an economic cycle stage and time criterions and can be recognized as economic cycles. In the current situation, when global economy and the situation in Lithuania show recovery signs from recession to growth, credit market reacts respectively. Though the question of business and credit volume cycles is very actual, because knowing credit market dynamics indications and synchronization level between credit and economic cycles different financial stability implementation politics measures can be developed. [.]