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Cyclical Lending Standards: A Structural Analysis / Kaiji Chen, Patrick C. Higgins, Tao Zha.
- Format:
- Book
- Author/Creator:
- Chen, Kaiji.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w27214.
- NBER working paper series no. w27214
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- Lending standards are a direct measure of credit conditions. We use the micro data merged from three separate sources to construct this measure and document that an uncertain macroeconomic outlook, rather than banks' balance sheet positions, was an important reason that a majority of banks tightened bank lending standards during the Great Recession. Our extensive data analysis disciplines how we introduce credit frictions in the banking sector into a macroeconomic model. The model estimation reveals that an exogenous shock to credit supply drives cyclical lending standards and accounts for a significant portion of fluctuations in bank loans and aggregate output.
- Notes:
- Print version record
- May 2020.
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