An Ardl Approach to Identify Bank Landing Channel in Indonesia
correction representation of the Autoregressive Distributed Lag (ARDL) model of two bank
credit markets. Each model takes account of one structural break associated with the 1998
financial crisis. The date of the crisis is determined by a unit root test that includes two
structural breaks. Instead of Johansenâ€™s cointegrating procedure, bounds test procedure is
implemented. The estimated error correction model for both markets suggests that bank
loans adjust more strongly towards loan supply, implying that monetary-induced disturbances
in bank loans originate from the supply side.
Keywords: bank lending channel, unit root, structural breaks
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