Correlation between GDP mortgages and loans : the European case

Abstract

The aim of the study is to investigate potential correlations between loans to firms or to households and the GDP of the main UE countries. The main idea concerns the possibility to design some new economic indicators which could be useful in predicting a crisis. Following a recent study of the European Central Bank I analyzed loans and mortgages in order to understand if their movements anticipate or follow the movements of GDP. The results I obtained are in line with the study of the ECB, showing that, in general, mortgages to households tend to anticipate GDP variations while loans to firm tend to follow. Moreover, I analyze the explanation of the EBC, and I add some more elements in order to understand the results of the study. I finally conclude that the analysis of loans and mortgages dynamics could give some relevant insights for building new indicators in order to prevent future crises.