Equilibrium credit is an important concept because it helps identify excessive credit provision. This paper proposes a … two-stage approach to determine equilibrium credit. It uses two stages to study changes in the demand for credit due to …-income countries over the period 1980-2010, this paper provides empirical evidence that the credit-to-GDP ratio is inappropriate to …

This paper proposes and tests a theory of credit-driven asset bubbles which are neutral in their real effects. When a … asset bubbles can form which exactly offset a bubble in household liabilities. Surprisingly, evidence from a VAR using long …-run restrictions supports the idea that asset bubbles are approximately neutral in their real effects before 2007. The evidence becomes …