The impact of economic instability on credit concessions: the case of the Covid-19 pandemic
DOI:
https://doi.org/10.21680/2176-9036.2024v16n2ID33626Keywords:
Covid-19, Credit Issuance Volume, Economic ImpactAbstract
Purpose: The atypical scenario resulting from the Covid-19 pandemic highlighted the issues caused by economic instability in the lives of society at large. These included mass unemployment, increased inflation and default, reduced economic activity due to worldwide circulation restrictions, heightened demand for credit and investments, business closures, among others. Given this backdrop, this research aims to analyze the impacts of the economic instability caused by Covid-19 on the volume of credit issuance in Brazil.
Methodology: The research methodology employed time series regression models in the Brazilian market and was based on historical values of macroeconomic variables. The study period spans from February 2013 to April 2023, divided into pre-pandemic (02/2013-02/2020) and pandemic (03/2020-04/2023) periods.
Results: It was observed that the impact of the Covid-19 pandemic on credit issuance volume was minor when controlling for other macroeconomic characteristics. There are indications that only the year 2020 exhibited more significant variations, with the average during the 2020 to 2023 period being not so different from the pre-pandemic period.
Contributions of the Study: This research adds another dimension to the impact of Covid-19 on the Brazilian economy and complements prior studies that assessed the effects of other crises on credit issuance volume. Based on the presented results, it is evident that other factors hold greater relevance in defining credit issuance volume even during financial crises.
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