Can Italy grow out of its NPL overhang? A panel threshold analysis

Mohaddes, Kamiar; Raissi, M; Weber, A

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Authors

Mohaddes, Kamiar

Raissi, M

Weber, A

Publication Date

2017-10

Journal Title

Economics Letters

ISSN

0165-1765

Publisher

Elsevier

Volume

159

Pages

185-189

Language

eng

Type

Article

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Citation

Mohaddes, K., Raissi, M., & Weber, A. (2017). Can Italy grow out of its NPL overhang? A panel threshold analysis. Economics Letters, 159 185-189. https://doi.org/10.1016/j.econlet.2017.08.001

Abstract

This paper examines whether a tipping point exists for real GDP growth in Italy above which the ratio of non-performing loans (NPLs) to total loans falls significantly. Estimating a heterogeneous dynamic panel–threshold model with data on 17 Italian regions over the period 1997–2014, we find that growth above 1.2%, if sustained for a number of years, is associated with a significant decline in the NPL ratio.

Keywords

Italy, non-performing loans, growth, panel tests of threshold effects

Identifiers

External DOI: https://doi.org/10.1016/j.econlet.2017.08.001

This record's URL: https://www.repository.cam.ac.uk/handle/1810/269977

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