Acessibilidade / Reportar erro

The role of credit in regional divergence: Spanish regions and Eurozone countries

O papel do crédito na divergência regional: regiões espanholas e países da Zona do Euro

ABSTRACT

This paper provides a theoretical account of the role of regional differences in cyclical patterns of credit availability for patterns of regional convergence or divergence. While mainstream theories imply either equalising regional capital flows, or else lower credit availability for peripheral regions due to market imperfections, Post-Keynesian theory of liquidity preference and financial structure imply the scope for greater credit volatility for peripheral regions, especially in downturns, contributing to real economic divergence. This latter account is assessed by means of an empirical analysis of patterns in bank credit over the business cycle among the Spanish regions and Eurozone countries.

KEYWORDS:
Credit procyclicality; liquidity preference; Post-Keynesian regional credit theory; Human P. Minsky

Centro de Economia Política Rua Araripina, 106, CEP 05603-030 São Paulo - SP, Tel. (55 11) 3816-6053 - São Paulo - SP - Brazil
E-mail: cecilia.heise@bjpe.org.br