Changes in bank lending standards and the macroeconomy

William F. Bassett, Mary Beth Chosak, John Driscoll and Egon Zakrajšek ()

Journal of Monetary Economics, 2014, vol. 62, issue C, 23-40

Abstract: Identifying macroeconomic effects of credit shocks is difficult because many of the same factors that influence the supply of loans also affect the demand for credit. Using bank-level responses to the Federal Reserve's Loan Officer Opinion Survey, we construct a new credit supply indicator: changes in lending standards, adjusted for the macroeconomic and bank-specific factors that also affect loan demand. Tightening shocks to this credit supply indicator lead to a substantial decline in output and the capacity of businesses and households to borrow from banks, as well as to a widening of credit spreads and an easing of monetary policy.

Keywords: Credit supply disruptions; Bank lending policies; Credit crunch (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (221)

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Working Paper: Changes in bank lending standards and the macroeconomy (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:62:y:2014:i:c:p:23-40

DOI: 10.1016/j.jmoneco.2013.12.005

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