EconPapers    
Economics at your fingertips  
 

The financial transmission of housing booms: evidence from Spain

Alberto Martin, Enrique Moral-Benito and Tom Schmitz

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: How does a housing boom affect credit to non-housing firms? Using bank, firm and loan-level microdata, we show that the Spanish housing boom reduced non-housing credit growth during its first years, but stimulated it later on. These patterns can be rationalized by financial constraints for banks. Constrained banks initially accommodated higher housing credit demand by reducing non-housing credit. Eventually, however, the housing boom increased bank net worth and expanded credit supply. A quantitative model, disciplined by our cross-sectional estimates, indicates that the crowding-out effect was substantial but temporary, and had been fully absorbed by the end of the boom.

Keywords: Housing bubble; credit; investment; financial frictions; financial transmission; Spain (search for similar items in EconPapers)
JEL-codes: E32 E44 G21 (search for similar items in EconPapers)
Date: 2018-06, Revised 2020-09
New Economics Papers: this item is included in nep-eec, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://econ-papers.upf.edu/papers/1613.pdf Whole Paper (application/pdf)

Related works:
Journal Article: The Financial Transmission of Housing Booms: Evidence from Spain (2021) Downloads
Working Paper: The Financial Transmission of Housing Booms: Evidence from Spain (2019) Downloads
Working Paper: The Financial Transmission of Housing Booms: Evidence from Spain (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1613

Access Statistics for this paper

More papers in Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).

 
Page updated 2025-03-22
Handle: RePEc:upf:upfgen:1613