Credit Matters

This paper develops a framework for analyzing macro-financial linkages in the United States. We estimate the effects of a negative shock to banks' capital/assetratio on lending standards, which in turn affect consumer credit, mortgages, and corporate loans, and the corresponding components of private spending (consumption, residential investment and business investment). In addition, our empirical model allows for feedback from spending and income to bank capital adequacy and credit. Hence, we trace the full credit cycle. An exogenous fall in the bank capital/asset ratio by one percentage poin

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Year of publication:	2008
Authors:	Bayoumi, Tamim A.
Other Persons:	Melander, Ola (contributor)
Publisher:	Washington : International Monetary Fund
Subject:	Kredit \| Credit \| Kreditgeschäft \| Bank lending \| Kreditmarkt \| Credit market

Extent:	Online-Ressource (29 p)
Series:	IMF Working Papers
Type of publication:	Book / Working Paper
Language:	English
Notes:	Description based upon print version of record Contents; I. Introduction; II. A Framework for Analyzing Macro-Financial Linkages; Figures; 1. A Framework for Macro-Financial Linkages; III. The Effect of the Bank Capital/Asset Ratio on Lending Standards; 2. Bank Capital Adequacy and Lending Standards; IV. The Effect of Lending Standards and Balance Sheets on Credit; Tables; 1. The Bank Capital/Asset Ratio and Loan Standards; 2. Loan Standards, Balance Sheet Variables, and Credit; V. The Effect of Credit on Spending; 3. The Effect of Credit on Spending; VI. The Effect of Spending on Income; 4. The Effect of Spending on Income VII. Feedback Loop through Balance Sheets of Banks, Firms and Households5. Feedback Effects of GDP Growth on Bank Capital; VIII. Bottom Line: Quantitative Importance of Macro-Financial Linkages; 3. The Effects of an Adverse Bank Capital Shock; 4. The Impact of an Adverse Capital Shock on the Level of GDP and its Components; 5. The Impact of an Adverse Capital Shock on GDP Growth and the Contribution of GDP Components; 6. The Effects of an Adverse Demand Shock; 7. The Impact of an Adverse Demand Shock on the Level of GDP; IX. Conclusions 6. Loan Standards, Balance Sheet Variables, and Bank CreditAppendices; I. Credit Regressions for Bank Lending; 7. The Effect of Credit on Personal Consumption Expenditure; II. Spending Regressions for Sub-Components of Consumption; References
ISBN:	978-1-4518-7027-5 ; 978-1-4519-1480-1 ; 978-1-4518-7027-5
Source:	ECONIS - Online Catalogue of the ZBW

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