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The collapse in bank lending in 2008-09 led directly to falling employment at nonfinancial firms

Chodorow-Reich, Gabriel (2014) The collapse in bank lending in 2008-09 led directly to falling employment at nonfinancial firms. LSE American Politics and Policy (31 Mar 2014). Website.

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Abstract

Does the health of banks on Wall Street affect economic outcomes on Main Street? After the 2008-09 financial crisis, bank lending to nonfinancial firms declined significantly, with effects on employment and incomes. Drawing on data from over 2,000 firms, Gabriel Chodorow-Reich finds that credit restrictions accounted for between one-third and one-half of the employment decline at small and medium firms in the year following the Lehman bankruptcy. He also finds that the ‘stickiness’ of bank-borrower relationships meant that many firms that that had pre-crisis links with less healthy lenders suffered more than those that had relationships with healthier ones.

Item Type: Online resource (Website)
Official URL: http://blogs.lse.ac.uk/usappblog/
Additional Information: © 2014 The Author; Online
Divisions: LSE
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HJ Public Finance
Sets: Collections > LSE American Politics and Policy (USAPP) Blog
Date Deposited: 08 Aug 2014 13:45
Last Modified: 17 Jan 2020 00:37
URI: http://eprints.lse.ac.uk/id/eprint/58800

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