Credit Supply and Business Investment During the Great Recession: Evidence from Public Records of Equipment Financing

2012 ◽  
Author(s):  
Jesse Edgerton
Keyword(s):  
Great Recession ◽  
Business Investment ◽  
Public Records ◽  
The Great Recession ◽  
Credit Supply

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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