Bank Loans and Economic Growth: Case of Uzbekistan

This article analyzes the various conflicting opinions and research results regarding the impact of bank loans on economic growth. Some views conclude that bank loans have a stronger influence on inflation rates rather than economic growth, while others argue that bank loans provide a significant boost to economic growth. In our opinion, these perspectives depend on the country's level of development and its development paths. Specifically, the first view tends to be prevalent in countries without well-developed markets, whereas in countries with perfect markets, especially in developed nations, the impact of loans on economic growth is substantial. It should also be emphasized that, regardless of the market's level of perfection, bank loans have a greater impact on economic growth than on inflation rates in the short and medium term. However, in the long term, the expansion of these loans has a more significant effect on inflation. In economic terms, we refer to this as the neutrality of money. In other words, long-term economic growth cannot be achieved solely through monetary policy