Credit
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- 30 Jan 2018
- Working Paper Summaries
Credit Supply Shocks, Network Effects, and the Real Economy
Using data for Spain between 2003 and 2013, this study examines firms’ responses to credit supply shocks during times of boom (expansion) and bust (financial crisis and recession). Results indicate that propagation of these shocks through the Spanish production network doubles the magnitude of the real effects typically estimated in the literature. This study also shows how such effects vary greatly during booms and busts.
- 08 Sep 2016
- Working Paper Summaries
A Model of Credit Market Sentiment
Recent empirical research in finance and economics has revived the idea that investor sentiment drives credit booms and busts. To explore the drivers of sentiment in credit markets, the authors model the two-way feedback between credit market sentiment and credit market outcomes. In their model the propagation of credit cycles is driven by the interplay between expectations and the refinancing nature of credit markets.
- 04 Mar 2016
- Working Paper Summaries
Credit-Market Sentiment and the Business Cycle
Using United States data from 1929 to 2013, Jeremy C. Stein and colleagues emphasize the role of credit-market sentiment as an important driver of the business cycle.
Trade Creditors' Information Advantage
Trade credit represents about a quarter of the liabilities of US firms. There are several theories explaining this fact. This study reexamines whether suppliers hold private information about their trade partners, by analyzing their behavior in bankruptcy.