How do housing bubbles affect other economic sectors? We show that in the presence of collateral constraints, a bubble … initially raises housing credit demand and crowds out credit to non-housing firms. If the bubble lasts, however, housing credit … repayments raise banks' net worth and expand credit supply, so that crowding-out eventually gives way to crowding-in. This is …

constraints, a housing bubble initially raises credit demand by housing firms while leaving credit supply unaffected. It therefore … crowds out credit to non-housing firms. If time passes and the bubble lasts, however, housing firms eventually pay back their … higher loans. This leads to an increase in banks' net worth and thus to an expansion in their supply of credit to all firms …

How do housing bubbles affect other economic sectors? We show that in the presence of collateral constraints, a bubble … initially raises housing credit demand and crowds out credit to non-housing firms. If the bubble lasts, however, housing credit … repayments raise banks' net worth and expand credit supply, so that crowding-out eventually gives way to crowding-in. This is …

role to certain bubbles may have far-reaching policy implications …

lending can be explained by a shift in credit towards both export-intensive firms and small banks without foreign asset … exposure that have a higher share of exporting firms in their credit portfolio. We also find that German regions where these …

lending can be explained by a shift in credit towards both export-intensive firms and small banks without foreign asset … exposure that have a higher share of exporting firms in their credit portfolio. We also find that German regions where these …

, financial shocks such as borrower defaults, collateral shocks and credit supply effects amplify economic downturns by reducing … the flow of credit from banks to the real sector. In this novel application to the euro area, we introduce capital …