Vitor Gomes Reginato

This thesis is composed of three essays that focus on bank credit and economic growth. The main objective of the first paper was to test the hypothesis of causality between banking development and economic expansion. Moreover, it was tested the causality in the opposite direction and the non-monotonicity of the relation between credit and GDP. For that, data were used for 106 countries from the year 1970 to 2016. The empirical results point to the bidirectional causality between these variables, besides confirming the relationship between these variables is non monotonic. In view of this result, the second and third essays have as main objective to analyze the main determinants of bank credit for the countries of South America and Brazil, respectively. For that, data from the South American countries were used for the years 2000 to 2016 in the second study, the same period of the third, which was based on data for Brazil. The main findings of the second study, which adopted the panel data methodology, indicate that domestic deposits and nonresident liabilities contribute positively to private credit growth. Economic growth leads to an increase in the volume of credit, while higher interest rates, both domestic and North American, reduce credit growth. Rising general price levels also negatively affect private sector credit. In addition, as to the composition of credit, domestic deposits and economic growth are the main components of credit expansion, and, in turn, inflation and domestic interest rates contribute negatively. In order to test if such relations also occur in Brazil, the third study used the VAR method, with very similar results to the second one. GDP and credit itself have a positive impact on loans. Affecting negatively are the interest rate, inflation, Brazil risk and deposits, this result opposite to that obtained in the previous work. Moreover, the time of adjustment to the isolated shock in each determinant variable varies, so that the impulse in the deposits was shown the fastest. The Brazil risk, on the other hand, presented the slowest. Finally, GDP and domestic deposits were also the main components of bank credit.