Journal of Financial Services Research · 2019 · 18 citations · 21 references
Social SciencesBusiness EconomicsEconomicsBankingFinancial EconomicsLabor EconomicsCommercial BankingCredit MarketsCredit RiskFinancial CrisesMonetary PolicyBorrower Welfare ImpactsCredit Supply ConstraintsCredit Supply ShocksExogenous ShocksFirm Lending RelationshipsGlobal Financial CrisisInternational Financial CrisesProductivity
This paper estimates the effects of changes in bank credit supply on the real economy. We use UK firm-level data around the global financial crisis and information on pre-existing bank lending relationships to isolate exogenous credit supply shocks. We find some evidence that contractions in credit supply substantially reduce labour productivity, wages, and capital per worker within firms, and increase the chance firms will fail. Our results have implications for the welfare costs of financial crises, and for the costs of policy measures affecting credit supply at other times.
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Credit Spreads and Business Cycle Fluctuations
Simon Gilchrist, Egon Zakrajšek · American Economic Review · 2012 · 2.2K citations