Molabe, Kgabo Mapitsi2018-02-072018-02-072016Molabe, Kgabo Mapitsi (2016) The role of bank credit in the business cycle, University of the Witwatersrand, Johannesburg, <https://hdl.handle.net/10539/23789>https://hdl.handle.net/10539/23789Submitted in partial fulfilment of the requirements for degree Master of Management in Finance and Investments in Wits Business School of the University of the WitwatersrandThis research paper examines an economy with debt and discusses the mechanism through which a financial crisis may arise, taking into account the business cycle theories as advocated by amongst others; Karl Marx, Friederich Hayek, and John Keynes. It is found that there are various channels through which financial crises may arise. Secondly, this research paper investigates the mechanism through which bank credit propagates and prolongs the business cycle. The analysis of the data reveals that post the crisis, recoveries are slower in developed nations versus developing nations and that the deeper the recession, the longer it takes for a country to recover. Thirdly, this research paper determines the critical debt level at which economies will start to recover, following a period of economic fragility. Finally, recommendations which could contribute towards the mitigation of causes and/or effects of economic crisis are made. Key words: Bank Credit, Business CycleOnline resource (ix, 77 leaves)enBank loans--South AfricaCredit--South AfricaBanks and banking--South AfricaBusiness enterprises--South Africa--FinanceThesis