scholarly journals Employment in the Great Recession: How Important Were Household Credit Supply Shocks?

2018 ◽  
Vol 2018 (074) ◽  
Author(s):  
◽  
Daniel García ◽  
Keyword(s):  
Great Recession ◽  
The Great Recession ◽  
Credit Supply ◽  
Supply Shocks ◽  
Household Credit

Racial Disparities in Credit Constraints in the Great Recession: Evidence from the UK

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
John Gathergood
Keyword(s):  
Racial Disparities ◽  
Great Recession ◽  
Credit Constraints ◽  
Racial Minority ◽  
Racial Groups ◽  
Credit Access ◽  
The Great Recession ◽  
Household Credit ◽  
The Difference ◽  
The Uk

Abstract This paper investigates racial disparities in household credit constraints using UK survey data. We find a widening disparity in the proportion of racial minority households reporting they face credit constraints compared with non-minority households over the period 2006-2009. By 2009 three times as many racial minority households faced credit constraints compared with non-minority households. The difference in credit constraints across racial minority and non-minority households is not explained by a broad set of covariates. While cross-section variation in reported credit constraints might most likely reflect unobservables, we argue this time series variation is very unlikely to arise due to unobservables and is evidence of growing perceived disparity in credit access between racial groups over the period.

scholarly journals Real vs. nominal cycles: a multistate Markov-switching bi-factor approach

2014 ◽  
Vol 18 (5) ◽  
Author(s):  
Danilo Leiva-Leon
Keyword(s):  
Business Cycle ◽  
Great Recession ◽  
Probabilistic Model ◽  
Housing Demand ◽  
Real Activity ◽  
The Great Recession ◽  
Supply Shocks ◽  
The Business Cycle ◽  
The Impact ◽  
Simultaneous Inferences

AbstractThis paper proposes a probabilistic model based on comovements and nonlinearities useful to assess the type of shock affecting each phase of the business cycle. By providing simultaneous inferences on the phases of real activity and inflation cycles, contractionary episodes are dated and categorized into demand, supply and mix recessions. The impact of shocks originated in the housing market over the business cycle is also assessed, finding that recessions are usually accompanied by housing deflationary pressures, while expansions are mainly influenced by housing demand shocks, with the only exception occurred during the period surrounding the “Great Recession,” affected by expansionary housing supply shocks.

Business Loans and the Transmission of Monetary Policy

2018 ◽  
Vol 54 (2) ◽  
pp. 925-965 ◽  
Author(s):  
Santiago Barraza ◽  
Andrea Civelli ◽  
Nicola Zaniboni
Keyword(s):  
Monetary Policy ◽  
Great Recession ◽  
Transmission Mechanism ◽  
The Great Recession ◽  
Credit Supply ◽  
Downward Shift ◽  
Transmission Of Monetary Policy

We study the transmission mechanism of monetary policy through business loans and illustrate subtle aspects of its functioning that relate to the contractual characteristics and the borrower–lender types of loans. We show that the puzzling increase in business loans in response to monetary tightening, documented before the Great Recession, is largely driven by drawdowns from existing commitments at large banks. Spot loans also rise and take a considerable amount of time to adjust. Banks, nonetheless, do curtail credit supply by shortening maturities of new loans. Following the Great Recession, the mechanism has worked differently, with loan responses to monetary tightening displaying a significant downward shift.

scholarly journals Failure to Launch: Housing, Debt Overhang, and the Inflation Option

2019 ◽  
Vol 11 (2) ◽  
pp. 228-274 ◽  
Author(s):  
Aaron Hedlund
Keyword(s):  
Cross Section ◽  
Great Recession ◽  
House Prices ◽  
Nominal Rigidities ◽  
Fixed Rate ◽  
Inflation Target ◽  
Debt Overhang ◽  
The Great Recession ◽  
Credit Supply ◽  
The Cross

Can inflating away nominal mortgage liabilities effectively combat recessions? I address this question using a model of illiquid housing, endogenous credit supply, and equilibrium default. I show that, in an ordinary recession, temporarily raising the inflation target has only modest or even counterproductive effects. However, during episodes like the Great Recession, inflation effectively boosts house prices, consumption, and dramatically cuts foreclosures, but only when fixed-rate mortgages are the dominant instrument. The quantitative implications of inflation also vary if other nominal rigidities or demand externalities are present. In the cross section, inflation delivers especially large gains to highly leveraged homeowners. (JEL D14, E31, E32, E52, G21, R31)

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