This paper explores the long-run effects of inflation on the dynamics of private sector bank credit and economic growth in Mexico over the period 1969–2011. With an ARDL-type model, the statistical results suggest that the availability of private sector bank credit in the economy exerts a positive impact on real GDP. In addition, inflation rates have contributed negatively to the increase in private credit, liquid liabilities, and financial development. A key outcome is that one percent increase in inflation is associated with a 0.07 % fall in long-run real rate of output through its effect on bank credit to the private sector. Another crucial finding is that policies of financial liberalization have helped stimulate economic growth. Reinforcing the literature on finance and growth, this study reaffirms that inflation rates are detrimental to long-run financial development and economic growth.

This study examines the nexus among energy consumption, CO2 emissions, financial development, and economic growth in 23 developing countries. The econometric approach is based on panel pairwise Granger causality and GMM estimations of panel VAR-Granger causality with fixed effects. Our study is probably one of the first to estimate joint relationships between financial (bank credit to private sector and liquid liabilities), energy (primary energy consumption and electricity generation), environmental (CO2 emissions), and economic variables (GDP and inflation rates) in less developed economies over the 2001-2019 period. The results confirm bidirectional causality between financial development and CO2, financial development and GDP, and primary energy consumption and CO2; and unidirectional from financial development to energy consumption and from electricity generation to CO2. We did not find evidence of a relationship between GDP and energy or CO2 emissions. Due to data availability, we could not complement our analysis with further testing, which would enrich the results. The research may guide policymakers in designing policies to reduce contamination, improve energy use, and promote financial development.

e objective of this paper is to assess empirically the effects of inflation rates on bank credit using panel data of the 32 Mexican states during 2003-2015. Our research method utilizes static models (pooled OLS, fixed effects, and random effects) and dynamic models (mean group, pooled mean group, and dynamic fixed effects) to analyze the relationship in the short and long runs. e main empirical result indicates that inflation rates exert negative effects on credit in the long run, but those effects tend to be positive in the short run. Concerning originality and findings, few papers study inflation and bank credit under macroeconomic stability, or in the case of Mexico with static and dynamic panel data models. However, one research limitation is the lack of data to apply the methodology before 1999 when inflation rates used to be higher. is would be useful to compare macroeconomic stability with instability.