Abstract:Due to the crucial role of credit in the economic activity of a country, there is a growing empirical literature examining the determinants of domestic credit to the private sector, which may be demand-side or supply-side factors. It is commonly held that excessive domestic debt reduces private sector credit, raise bank lending rates, and shrink output as the Government competes with the private sector for private savings. For this reason, the aim of this paper is to determine whether persistent budget deficit… Show more
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