Big Techs and the Credit Channel of Monetary Policy

Fiorella De Fiore, Leonardo Gambacorta and Cristina Manea

No 18217, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We document some stylized facts on big tech credit and rationalize them through the lens of a model where big techs facilitate matching on the e-commerce platform and extend loans. The big tech reinforces credit repayment with the threat of exclusion from the platform, while bank credit is secured against collateral. Our model suggests that: (i) a rise in big techs’ matching efficiency increases the value for firms of trading on the platform and the availability of big tech credit; (ii) big tech credit mitigates the initial response of output to a monetary shock, while increasing its persistence; (iii) the efficiency gains generated by big techs are limited by the distortionary fees collected from users.

Keywords: Monetary policy; Credit frictions; Big tech (search for similar items in EconPapers)
JEL-codes: E44 E51 E52 G21 G23 (search for similar items in EconPapers)
Date: 2023-06
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Working Paper: Big techs and the credit channel of monetary policy (2023)
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