Arbeitspapier

Growing like Germany: Local public debt, local banks, low private investment

Over 2010-2016, municipal debt in Germany crowded out private investment worth 1 percent of GDP. Forced to lend to municipalities by their statutes, local public banks compensated for declining municipal-debt yields by charging higher rates to firms in Germany's locally segmented credit markets. The ensuing crowding out was made worse by increased municipal borrowing when expensive fiscal commitments were shifted from federal and state to the municipal levels following the introduction of the debt brake. Our results identify new channels through which low interest rates adversely affect real outcomes and locally segmented credit markets can amplify contractionary effects from fiscal austerity.

Sprache
Englisch

Erschienen in
Series: Working Paper ; No. 380

Klassifikation
Wirtschaft
Investment; Capital; Intangible Capital; Capacity
Money and Interest Rates: General
Fiscal Policy
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
Current Account Adjustment; Short-term Capital Movements
Fiscal Policies and Behavior of Economic Agents: Firm
Thema
local public finance
firm-level investment
crowding out
fiscal austerity
fiscal rules
global and intra-European imbalances

Ereignis
Geistige Schöpfung
(wer)
Hoffmann, Mathias
Stewen, Iryna
Stiefel, Michael
Ereignis
Veröffentlichung
(wer)
University of Zurich, Department of Economics
(wo)
Zurich
(wann)
2023

DOI
doi:10.5167/uzh-201446
Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Hoffmann, Mathias
  • Stewen, Iryna
  • Stiefel, Michael
  • University of Zurich, Department of Economics

Entstanden

  • 2023

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