Credit supply shocks in the Netherlands

We investigate the role of credit supply shocks in the Netherlands in a structural VAR framework following the identification scheme proposed by Barnett and Thomas (2014). We find evidence that positive credit supply shocks boosted growth in the years leading up to 2007 before adverse credit supply shocks depressed GDP growth between 2008 and early 2012. From late 2012 onwards, credit supply shocks were not important factors behind the sluggish GDP growth in the Netherlands. When looking at which components of GDP are most affected by credit supply shocks, we find evidence that investment is hit considerably harder than consumption, although it recovers more quickly.