Arbeitspapier
Quantity rationing of credit
Quantity rationing of credit, when firms are denied loans, has greater potential to explain macroeconomics fluctuations than borrowing costs. This paper develops a DSGE model with both types of financial frictions. A deterioration in credit market confidence leads to a temporary change in the interest rate, but a persistent change in the fraction of firms receiving financing, which leads to a persistent fall in real activity. Empirical evidence confirms that credit market confidence, measured by the survey of loan officers, is a significant leading indicator for capacity utilization and output, while borrowing costs, measured by interest rate spreads, is not.
- Language
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Englisch
- ISBN
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978-952-462-786-3
- Bibliographic citation
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Series: Bank of Finland Research Discussion Papers ; No. 3/2012
- Classification
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Wirtschaft
General Aggregative Models: General
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Financial Markets and the Macroeconomy
Monetary Policy, Central Banking, and the Supply of Money and Credit: General
- Subject
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quantity rationing
credit
VAR
- Event
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Geistige Schöpfung
- (who)
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Waters, George A.
- Event
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Veröffentlichung
- (who)
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Bank of Finland
- (where)
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Helsinki
- (when)
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2012
- Handle
- Last update
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20.09.2024, 8:22 AM CEST
Data provider
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Object type
- Arbeitspapier
Associated
- Waters, George A.
- Bank of Finland
Time of origin
- 2012