Credit mismatch and breakdown

Becsi, Zsolt; Li, Victor E.; Wang, Ping

doi:10.1016/j.euroecorev.2012.11.002

Cited by 15 publications

(11 citation statements)

References 37 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…6 Costly screening can be motivated as in the literature that followed Broecker (1990). Costly matching can be motivated by non-price competition for borrowers (e.g., Heider and Inderst (2012)) or search frictions (e.g., Becsi et al (2013)). I have in mind the former.…”

Section: Retention Decisions and Project Completionmentioning

confidence: 99%

Inefficiently low screening with Walrasian markets

Hachem

2021

Journal of Monetary Economics

View full text Add to dashboard Cite

Part of this paper is based on the second chapter of my dissertation at the University of Toronto. I am extremely grateful to Huberto Ennis, Ricardo Reis, and an anonymous referee for many insightful suggestions. Financial support from UVA Darden and from Chicago Booth in prior stages of this work is also gratefully acknowledged. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

show abstract

Section: Retention Decisions and Project Completionmentioning

confidence: 99%

Inefficiently low screening with Walrasian markets

Hachem

2021

Journal of Monetary Economics

View full text Add to dashboard Cite

show abstract

“…Finally, it is worth mentioning that Becsi et al (2013) also investigated the role of credit search frictions on rm dynamics. However, they do so with a steady-state analysis only, i.e without the business cycle eects and estimations that we deliver here.…”

Section: Cepii Working Papermentioning

confidence: 99%

Uncertainty shocks and firm creation: Search and monitoring in the credit market

Brand

Isoré

Tripier

2019

Journal of Economic Dynamics and Control

View full text Add to dashboard Cite

A striking feature of the Great Recession in the US is the sharp drop in firm creation in 2008-2010 and its following slow recovery. We develop a model with two financial frictions, search and monitoring on the credit market, to study the role of uncertainty shocks in the firm creation process. Uncertainty shocks in the financial sector turn out to be a major business cycle contributor of both macrofinancial aggregates and firm dynamics. Uncertainty shocks explain most of the drop in firm creation and output during the Great Recession.

show abstract

“…In Caballero and Hammour (), reallocation rises during upturns because hold‐up problems in credit matches soften, favoring the creation of matches. Besides countercyclical changes in allocative frictions, a second force that can drive a procyclical reallocation is the impact of shocks on credit market participation (Becsi, Li, and Wang ). However, positive shocks can increase credit market participation but also alter firm composition, favoring the access to credit of low productivity firms when reallocation rises (Becsi, Li, and Wang ).…”

Section: Volatility and Cyclical Behavior Of Reallocationmentioning

confidence: 99%

“…All in all, approaches that integrate search frictions with frictions within credit relationships thus appear to be well positioned to capture salient properties of credit flows. In Becsi, Li, and Wang (), entrepreneurs face search frictions and also face rationing within credit relationships because they can abscond funds. Florian‐Hoyle and Francis () and Brand, Isore, and Tripier () incorporate search frictions into DSGE models of the financial accelerator.…”

Section: Credit Reallocation Credit Boom Deleveragingmentioning

confidence: 99%

“…For example, Chamley and Rochon (2011) predict that in an economy with both credit search frictions and monitoring costs within credit relationships, a reduction in loan monitoring costs and increase in monitoring incentives (due, e.g., to policy reforms) push the credit market from a regime with high credit growth and rollover and low reallocation to a less frictional regime with lower rollover and more flexible reallocation. This strand of models also predicts that, under some conditions, the intensification in reallocation can be associated with increased volatility and procyclicality of reallocation (Chamley and Rochon 2011, Becsi, Li, and Wang 2013, Florian-Hoyle and Francis 2017. We will return to these points below.…”

mentioning

confidence: 99%

See 1 more Smart Citation

Credit Reallocation, Deleveraging, and Financial Crises

Hyun¹,

Minetti²

2018

J of Money Credit Banking

View full text Add to dashboard Cite

This paper studies how the process of reallocation of credit across firms behaves before and after financial crises. Applying the methodology typically used for measuring job reallocation, we track credit reallocation across Korean firms for over three decades (1980–2012). The credit boom preceding the 1997 crisis featured a slowdown of credit reallocation. After the crisis and the associated reforms, the creditless recovery (deleveraging) masked a dramatic intensification and increased procyclicality of credit reallocation. The findings suggest that the intensification of reallocation was efficiency‐enhancing.

show abstract

Credit mismatch and breakdown

Cited by 15 publications

References 37 publications

Inefficiently low screening with Walrasian markets

Inefficiently low screening with Walrasian markets

Uncertainty shocks and firm creation: Search and monitoring in the credit market

Credit Reallocation, Deleveraging, and Financial Crises

Contact Info

Product

Resources

About