Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316894 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11780
Publisher: 
CESifo GmbH, Munich
Abstract: 
Using a customized survey and an information-provision experiment, we establish that loan officers' individual subjective expectations about inflation, GDP growth, and policy rates vary substantially within and across bank types and have a sizable causal effect on credit supply decisions. Decisions about loan issuance and pricing exhibit large heterogeneity based on loan officers' subjective expectations even for the same borrower assessed at the same time. Moreover, officers with rosier macroeconomic expectations penalize less borrowers with worsening fundamentals than do officers with more pessimistic expectations. Our findings have implications for theories of financial intermediation and reveal an overlooked human-based friction to the transmission of monetary policy.
Subjects: 
credit supply
financial frictions
behavioral macroeconomics
behavioral finance
monetary policy
banking
micro-to-macro
randomized control trials
surveys.
JEL: 
D84
D91
E44
G21
Document Type: 
Working Paper
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