Did saving Wall Street really save Main Street: the real effects of TARP on local economic conditions

Allen Berger () and Raluca Roman ()

No RWP 15-13, Research Working Paper from Federal Reserve Bank of Kansas City

Abstract: We investigate whether saving Wall Street through the Troubled Assets Relief Program (TARP) really saved Main Street during the recent financial crisis. Our difference-in-difference analysis suggests that TARP statistically and economically significantly increased net job creation and net hiring establishments and decreased business and personal bankruptcies. The results are robust, including accounting for endogeneity. The main mechanisms driving the results appear to be increases in commercial real estate lending and off-balance sheet real estate guarantees. These results suggest that saving Wall Street via TARP may have helped save Main Street, complementing the TARP literature and contributing to the cost-benefit debate.

Keywords: Banks; Economic conditions; Financial crisis; TARP (search for similar items in EconPapers)
JEL-codes: G18 G21 G28 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2015-10-01
New Economics Papers: this item is included in nep-ban and nep-ure
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Citations: View citations in EconPapers (38)

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https://www.kansascityfed.org/documents/308/Did_Sa ... P_on_Local_Econo.pdf (application/pdf)

Related works:
Journal Article: Did Saving Wall Street Really Save Main Street? The Real Effects of TARP on Local Economic Conditions (2017)
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