The loan puzzle in Mexico
Empirical evidence for advanced economies suggests that following a monetary tightening, commercial and industrial bank loans show a positive “puzzling response”. Since there is no wide evidence for the Mexican case, this paper analyzes the response of bank loans at the sectoral level after a moneta...
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| Format: | Article |
| Language: | English |
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Elsevier
2025-03-01
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| Series: | Latin American Journal of Central Banking |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2666143824000413 |
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| _version_ | 1850235145208987648 |
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| author | Luis Fernando Colunga-Ramos |
| author_facet | Luis Fernando Colunga-Ramos |
| author_sort | Luis Fernando Colunga-Ramos |
| collection | DOAJ |
| description | Empirical evidence for advanced economies suggests that following a monetary tightening, commercial and industrial bank loans show a positive “puzzling response”. Since there is no wide evidence for the Mexican case, this paper analyzes the response of bank loans at the sectoral level after a monetary contraction. For this purpose, I estimate a structural VAR model with block exogeneity to identify a monetary shock for a small open economy. The results show evidence of firms’ loan puzzles during 2001-2019 characterized by an inflation-targeting regime in Mexico. Those short-lived loan puzzles are mainly observed in sectors with the lowest delinquency rates during the period of analysis. My finding of the loan puzzle at the aggregate level in a recent sample arises in a closed as well as in an open economy approach. |
| format | Article |
| id | doaj-art-33c67adaf646451191cbaaf24aec4bdb |
| institution | OA Journals |
| issn | 2666-1438 |
| language | English |
| publishDate | 2025-03-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Latin American Journal of Central Banking |
| spelling | doaj-art-33c67adaf646451191cbaaf24aec4bdb2025-08-20T02:02:24ZengElsevierLatin American Journal of Central Banking2666-14382025-03-016110016010.1016/j.latcb.2024.100160The loan puzzle in MexicoLuis Fernando Colunga-Ramos0Dirección General de Investigación Económica, Banco de Mexico, MexicoEmpirical evidence for advanced economies suggests that following a monetary tightening, commercial and industrial bank loans show a positive “puzzling response”. Since there is no wide evidence for the Mexican case, this paper analyzes the response of bank loans at the sectoral level after a monetary contraction. For this purpose, I estimate a structural VAR model with block exogeneity to identify a monetary shock for a small open economy. The results show evidence of firms’ loan puzzles during 2001-2019 characterized by an inflation-targeting regime in Mexico. Those short-lived loan puzzles are mainly observed in sectors with the lowest delinquency rates during the period of analysis. My finding of the loan puzzle at the aggregate level in a recent sample arises in a closed as well as in an open economy approach.http://www.sciencedirect.com/science/article/pii/S2666143824000413Bank lending channelLoan puzzleMonetary policy shocksSVAR |
| spellingShingle | Luis Fernando Colunga-Ramos The loan puzzle in Mexico Latin American Journal of Central Banking Bank lending channel Loan puzzle Monetary policy shocks SVAR |
| title | The loan puzzle in Mexico |
| title_full | The loan puzzle in Mexico |
| title_fullStr | The loan puzzle in Mexico |
| title_full_unstemmed | The loan puzzle in Mexico |
| title_short | The loan puzzle in Mexico |
| title_sort | loan puzzle in mexico |
| topic | Bank lending channel Loan puzzle Monetary policy shocks SVAR |
| url | http://www.sciencedirect.com/science/article/pii/S2666143824000413 |
| work_keys_str_mv | AT luisfernandocolungaramos theloanpuzzleinmexico AT luisfernandocolungaramos loanpuzzleinmexico |