Lending Cycles

P.K. Asea and Stephen Blomberg

Working Papers from Wellesley College - Department of Economics

Abstract: We investigate the lending behavior of banks by exploiting a rich oanel dataset on the contract terms of approximately two million commercial and industrial loans granted by 580 banks between 1977-1993. Using a Markov switching panel model we demonstrate that banks change their lending standards - from tightness to laxity - systematically over the cycle. We then use an efficient minimum chi-square estimator.

Keywords: CREDIT; UNEMPLOYMENT; BUSINESS CYCLES (search for similar items in EconPapers)
JEL-codes: C33 E24 E32 (search for similar items in EconPapers)
Pages: 42 pages
Date: 1997
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Lending cycles (1998)
Working Paper: Lending Cycles (1997)
Working Paper: Lending Cycles (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:wecoec:97-01

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