The Effect of Cash Injections: Evidence from the 1980s Farm Debt Crisis

Nittai K. Bergman, Rajkamal Iyer and Richard Thakor

No 23546, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: What is the effect of cash injections during financial crises? Exploiting county-level variation arising from random weather shocks during the 1980s Farm Debt Crisis, we analyze and measure the effect of local cash flow shocks on the real and financial sector. We show that such cash flow shocks have significant impact on a host of economic outcomes, including land values, loan delinquency rates, the probability of bank failure, employment, and wages. Estimates of the effect of local cash flow shocks on county income levels during the financial crisis yield a multiplier of 1.63.

JEL-codes: D22 D24 D31 E23 E24 E51 G01 G21 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-agr, nep-his and nep-mac
Note: CF EFG IFM LS ME
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Published as Nittai K Bergman & Rajkamal Iyer & Richard T Thakor & Philip Strahan, 2020. "The Effect of Cash Injections: Evidence from the 1980s Farm Debt Crisis," The Review of Financial Studies, vol 33(11), pages 5092-5130.

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Journal Article: The Effect of Cash Injections: Evidence from the 1980s Farm Debt Crisis (2020)
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