Employment in the Great Recession: How Important Were Household Credit Supply Shocks?

Daniel Garcia

No 2018-074, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: I pool data from all large multimarket lenders in the U.S. to estimate how many of the over seven million jobs lost in the Great Recession can be explained by reductions in the supply of mortgage credit. I construct a mortgage credit supply instrument at the county level, the weighted average (by prerecession mortgage market shares) of liquidity-driven lender shocks during the recession. The reduction in mortgage supply explains about 15 percent of the employment decline. The job losses are concentrated in construction and finance.

Keywords: Great Recession; Credit supply; Employment (search for similar items in EconPapers)
JEL-codes: E44 G21 R31 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2018-11-13
New Economics Papers: this item is included in nep-mac and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2018-74

DOI: 10.17016/FEDS.2018.074

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