DOI: 10.52324/001c.9591
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David L. Barkley, Peter E. Helander

Abstract: The Granger test for causality was applied to [1975][1976][1977][1978][1979][1980] loan and retail sales data for 27 non-metropolitan Arizona communities to determine if banks have played an active or passive role in community development. Regression results for Arizona indicate that bank lending was sensitive to past local economic activity. No statistical evidence was found to indicate that bank lending leads local economic development.