Rajkamal Iyer (Imperial College Business School)
Estimating the Impact of Loan Supply Shocks
Abstract: Using a simple model of firm borrowing with standard ingredients, we show that commonly used empirical approaches in the literature do not recover the impact of credit supply shocks on either loan-level lending or on total firm-level borrowing and real outcomes. We propose new estimators that recover the impact of credit supply shocks on total firm-level borrowing, loan-level lending, and real effects. We apply our methodology to the 2011 credit crisis in Spain and show that it implies significantly smaller effects of loan supply shocks than those generated by current empirical approaches.
Discussant: Rajkamal Iyer (with Nittai K. Bergman, Alejandro Casado, Itay Saporta-Eksten)
Chair: Gianmarco Ruzzier.
Contact: Gianmarco Ruzzier.
Location: Meeting room DG Economics.
Timetable: 2025.10.02 (12:00-13:00)