Business Credit Programs in the Pandemic Era

Samuel G. Hanson, Jeremy C. Stein, Adi Sunderam and Eric Zwick
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Samuel G. Hanson: Harvard Business School
Jeremy C. Stein: Harvard University
Adi Sunderam: Harvard Business School
Eric Zwick: University of Chicago Booth School of Business

Brookings Papers on Economic Activity, 2020, vol. 51, issue 3 (Fall), 3-60

Abstract: We develop a pair of models that speak to the goals and design of the sort of business lending and corporate bond purchase programs that have been introduced by governments in response to the ongoing COVID-19 pandemic. An overarching theme is that, in contrast to the classic lender-oflast-resort thinking that underpinned much of the response to the 2007-2009 global financial crisis, an effective policy response to the pandemic will require the government to accept the prospect of significant losses on credit extended to private sector firms.

Keywords: COVID-19; business lending; corporate bond purchase programs; private sector; firms (search for similar items in EconPapers)
Date: 2020
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