Traditional econometric analysis concentrate on classical methods which are far from suitable handling actual economic problems. Modern econometric analysis tries to develop new approaches from an economic perspective. As a consequence, there is less of a unified econometric theory than in...

The paper analyses the potential impact of stock market developments on lending behaviour from different perspectives. First we scrutinize the impact of stock market movements on the banks’ and on the borrowers’ balance sheets. Subsequently we estimate aggregate credit supply and demand...