General Management

- May 19, 2022
- Article
How to Build a Life: Mindfulness Hurts. That’s Why It Works.

By: Arthur C. Brooks
- May 19, 2022
- Article
How to Build a Life: Mindfulness Hurts. That’s Why It Works.

By: Arthur C. Brooks
- May 18, 2022
- Other Article
Want to Keep Your Employees Happy? Offer these 5 Things

By: Rosabeth M. Kanter
- May 18, 2022
- Other Article
Want to Keep Your Employees Happy? Offer these 5 Things

By: Rosabeth M. Kanter
- 2022
- Working Paper
Distributional Consequences of Monetary Policy Across Races: Evidence from the U.S. Credit Register

By: Laura Alfaro, Ester Faia and Camelia Minoiu

We examine the consequences of monetary policy on racial disparities, focusing on the role of bank lending to firms through collateral and selection channels. Leveraging comprehensive loan-level data from the U.S. credit register (Y-14Q) of the Federal Reserve, we show that firms in Black communities obtain business loans that are more expensive and have a shorter maturity. These firms are also more likely to experience adverse credit supply shocks, controlling for firms' risk and investment opportunities, as well as geographic and cultural covariates. We also study the effects of monetary policy across racial groups and document that, following a monetary policy tightening, banks extend loans to firms in Black communities at disproportionately higher interest rates. Furthermore, banks pass a monetary tightening through to loan rates for borrowers who have no collateral, have prior defaults, and have a shorter banking relationship, but even more to loan rates for firms in Black communities. Our findings suggest that monetary policy has distributional consequences in the form of tightened selectivity for Black minorities through lending conditions. Our analysis calls for place-based policies that target certain minority groups.
- 2022
- Working Paper
Distributional Consequences of Monetary Policy Across Races: Evidence from the U.S. Credit Register

By: Laura Alfaro, Ester Faia and Camelia Minoiu

We examine the consequences of monetary policy on racial disparities, focusing on the role of bank lending to firms through collateral and selection channels. Leveraging comprehensive loan-level data from the U.S. credit register (Y-14Q) of the Federal Reserve, we show that firms in Black communities obtain business loans that are more expensive...

About the Unit

The General Management Unit is concerned with the leadership and management of the enterprise as a whole. This concern encompasses:

the personal values and qualities of effective general managers and enterprise leaders;
the philosophies, values, and strategies that inform successful enterprises; and
the relation of enterprise to the broader community and other external constituencies.

The Unit's work is conceived and carried out principally in four interest groups, each of which has its own leadership, research agenda, and teaching programs:

Management Policy and Process
Management Information Systems
Society and Enterprise
Leadership, Values, and Corporate Responsibility

Recent Publications

How to Build a Life: Mindfulness Hurts. That’s Why It Works.

By: Arthur C. Brooks

May 19, 2022 |
Article |
The Atlantic

Citation

Read Now

Want to Keep Your Employees Happy? Offer these 5 Things

By: Rosabeth M. Kanter

May 18, 2022 |
Other Article |
CNN.com

Citation

Read Now

How to Build a Life: The Key to a Good Parent-Child Relationship? Low Expectations.

By: Arthur C. Brooks

May 12, 2022 |
Article |
The Atlantic

Citation

How to Build a Life: Ben Franklin’s Radical Theory of Happiness

By: Arthur C. Brooks

May 5, 2022 |
Article |
The Atlantic

Citation

Read Now

Distributional Consequences of Monetary Policy Across Races: Evidence from the U.S. Credit Register

By: Laura Alfaro, Ester Faia and Camelia Minoiu

2022 |
Working Paper |
Faculty Research

We examine the consequences of monetary policy on racial disparities, focusing on the role of bank lending to firms through collateral and selection channels. Leveraging comprehensive loan-level data from the U.S. credit register (Y-14Q) of the Federal Reserve, we show that firms in Black communities obtain business loans that are more expensive and have a shorter maturity. These firms are also more likely to experience adverse credit supply shocks, controlling for firms' risk and investment opportunities, as well as geographic and cultural covariates. We also study the effects of monetary policy across racial groups and document that, following a monetary policy tightening, banks extend loans to firms in Black communities at disproportionately higher interest rates. Furthermore, banks pass a monetary tightening through to loan rates for borrowers who have no collateral, have prior defaults, and have a shorter banking relationship, but even more to loan rates for firms in Black communities. Our findings suggest that monetary policy has distributional consequences in the form of tightened selectivity for Black minorities through lending conditions. Our analysis calls for place-based policies that target certain minority groups.