02205cas a2200325 a 4500 AALejournalIMF017532 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475588651 1018-5941 BD-DhAAL BD-DhAAL Mohaddes, Kamiar. Can Italy Grow Out of Its NPL Overhang? : A Panel Threshold Analysis / Kamiar Mohaddes, Mehdi Raissi, Anke Weber. Washington, D.C. : International Monetary Fund, 2017. 1 online resource (17 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines whether a tipping point exists for real GDP growth in Italy above which the ratio of non-performing loans (NPLs) to total loans falls significantly. Estimating a heterogeneous dynamic panel-threshold model with data on 17 Italian regions over the period 1997-2014, we provide evidence for the presence of growth-threshold effects on the NPL ratio in Italy. More specifically, we find that real GDP growth above 1.2 percent, if sustained for a number of years, is associated with a significant decline in the NPLs ratio. Achieving such growth rates requires decisively tackling long-standing structural rigidities and improving the quality of fiscal policy. Given the modest potential growth outlook, however, under which banks are likely to struggle to grow out of their NPL overhang, further policy measures are needed to put the NPL ratio on a firm downward path over the medium term. Mode of access: Internet Nonperforming Loans imf Real GDP imf Real Output Growth imf WP imf Italy imf Raissi, Mehdi. Weber, Anke. IMF Working Papers; Working Paper ; No. 2017/066 Full text available on IMF http://elibrary.imf.org/view/journals/001/2017/066/001.2017.issue-066-en.xml IMF e-Library