Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130627
Authors: 
Chen, Kaiji
Zha, Tao
Year of Publication: 
2015
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2015-8
Abstract: 
We take a structural approach to assessing the empirical importance of shocks to the supply of bank-intermediated credit in affecting macroeconomic fluctuations. First, we develop a theoretical model to show how credit supply shocks can be transmitted into disruptions in the production economy. Second, we use the unique micro-banking data to identify and support the model's key mechanism. Third, we find that the output effect of credit supply shocks is not only economically and statistically significant but also consistent with the vector autogression evidence. Our mode estimation indicates that a negative one-standard-deviation shock to credit supply generates a loss of output by 1 percent.
Subjects: 
intermediation cost
credit supply channel
micro bank-level data
call report
senior loan officers
identification
supply and demand
intermediation costs
endogenous monitoring activities
JEL: 
E32
E44
G21
C51
C81
C82
Document Type: 
Working Paper

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