On the Direct and Indirect Real Effects of Credit Supply Shocks

Laura  Alfaro; Manuel  García-Santana; Enrique  Moral-Benito

Other Article | Vox, CEPR Policy Portal | July 4, 2018

On the Direct and Indirect Real Effects of Credit Supply Shocks

by Laura Alfaro, Manuel García-Santana and Enrique Moral-Benito

Abstract

Propagation through buyer-seller interactions may amplify the aggregate impact of bank lending shocks on real activity. This column presents insights from estimating the direct and indirect effects of exogenous credit supply shocks in Spain between 2002 and 2013. Both direct and indirect effects of bank credit shocks had sizable effects on investment and output throughout the period. Trade credit extended by suppliers and price adjustments both appear to explain downstream propagation of financial shocks.

Keywords: credit supply shocks; Economics; Credit; System Shocks; Spain;

Format: Electronic

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Alfaro, Laura, Manuel García-Santana, and Enrique Moral-Benito. "On the Direct and Indirect Real Effects of Credit Supply Shocks." Vox, CEPR Policy Portal (July 4, 2018).

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On the Direct and Indirect Real Effects of Credit Supply Shocks

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