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Do Credit Market Shocks affect the Real Economy? Quasi-Experimental Evidence from the Great Recession and 'Normal' Economic Times / Michael Greenstone, Alexandre Mas, Hoai-Luu Nguyen.
- Format:
- Book
- Author/Creator:
- Greenstone, Michael.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20704.
- NBER working paper series no. w20704
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- We estimate the effect of the reduction in credit supply that followed the 2008 financial crisis on the real economy. We predict county lending shocks using variation in pre-crisis bank market shares and estimated bank supply-shifts. Counties with negative predicted shocks experienced declines in small business loan originations, indicating that it is costly for these businesses to find new lenders. Using confidential microdata from the Longitudinal Business Database, we find that the 2007-2009 lending shocks accounted for statistically significant, but economically small, declines in both small firm and overall employment. Predicted lending shocks affected lending but not employment from 1997-2007.
- Notes:
- Print version record
- November 2014.
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