Gross Loan Flows

Craig, Ben R.; Haubrich, Joseph G.

doi:10.26509/frbc-wp-200604

Cited by 10 publications

(12 citation statements)

References 16 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…All of the series are highly autocorrelated even after being filtered. This differs from the individual bank level results reported by Craig and Haubrich (2006). At the individual bank level they report much less autocorrelation.…”

Section: Bank Loan Market Factscontrasting

confidence: 95%

See 1 more Smart Citation

Bank Loan Search

Frank¹

2011

SSRN Journal

View full text Add to dashboard Cite

This paper provides a search model of bank loans in which it is costly for firms and banks to find each other. The negotiated loan interest rate must compensate both parties for their search costs. In the model, if the original interest rate is low enough, then an increase in the risk-free rate leads to an increase in the loan rate. But if the original interest rate is high enough, then an increase in the risk-free rate leads to a drop in the loan rate due to the impact on the present value of future profits. The model provides a rationale for the sluggish adjustment of the aggregate volume of bank loans. The main empirical puzzle relative to the model is why loan defaults increase after the end of a recession, even as demand for new loans is increasing.

show abstract

Section: Bank Loan Market Factscontrasting

confidence: 95%

“…As a result there is more volatility at the individual bank level and more persistence in the volume of bank loans at the aggregate level. Craig and Haubrich (2006) make interesting comparisons between the bank loan market and the job market. Loans exhibit much less seasonality than do jobs.…”

Section: Introductionmentioning

confidence: 99%

Bank Loan Search

Frank¹

2011

SSRN Journal

View full text Add to dashboard Cite

show abstract

“…See Davis and Haltiwanger (1999) for a review. For applications of analogous backward-looking reallocation measures to other outcomes, see Dell'Ariccia and Garibaldi (2005) and Craig and Haubrich (2013) on bank lending, Eisfeldt and Rampini (2006) on physical capital, Davis et al (2009) on sales, Broda and Weinstein (2010) on consumer products, Iacovone and Jovorcik (2010) on export products, Herrera, Kolar and Minetti (2011) on business credit, and Afonso and Lagos (2015) on the federal funds market. seen during the financial crisis of 2008-09 and the dot.com bust of the early 2000s.…”

mentioning

confidence: 99%

COVID-19 Is Also a Reallocation Shock

Barrero¹,

Bloom²,

Davis³

2020

Preprint

View full text Add to dashboard Cite

Drawing on firm-level expectations at a one-year forecast horizon in the Survey of Business Uncertainty (SBU), we construct novel, forward-looking reallocation measures for jobs and sales. These measures rise sharply after February 2020, reaching rates in April that are 2.4 (3.9) times the pre-COVID average for jobs (sales). We also draw on special questions in the April SBU to quantify the near-term impact of the COVID-19 shock on business staffing. We find 3 new hires for every 10 layoffs caused by the shock and estimate that 42 percent of recent layoffs will result in permanent job loss. Our survey evidence aligns well with anecdotal evidence of large pandemic-induced demand increases at some firms, with contemporaneous evidence on gross business formation, and with a sharp pandemic-induced rise in equity return dispersion across firms. After developing the evidence, we consider implications of our evidence for the economic outlook and for policy responses to the pandemic. Unemployment benefit levels that exceed worker earnings, policies that subsidize employee retention, occupational licensing restrictions, and regulatory barriers to business formation will impede reallocation responses to the COVID-19 shock.

show abstract

“… Dell’Ariccia and Garibaldi () and Craig and Haubrich () construct databases of credit flows and show that the US credit market is characterized by large cyclical flows of credit expansions and contractions that can be explained in terms of matching friction. …”

mentioning

confidence: 99%

Search Frictions, Credit Market Liquidity and Net Interest Margin Cyclicality

Beaubrun-Diant

Tripier

2014

Economica

View full text Add to dashboard Cite

This paper contributes to the body of knowledge on search frictions in credit markets by demonstrating their ability to explain why the net interest margins of banks behave countercyclically. During periods of expansion, a fall in the net interest margin proceeds from two mechanisms: (i) lenders accept that they must finance entrepreneurs who have lower productivity; (ii) the liquidity of the credit market rises, which simplifies access to loans for entrepreneurs and thereby reinforces their threat point when bargaining the interest rate of the loan.

show abstract

Gross Loan Flows

Cited by 10 publications

References 16 publications

Bank Loan Search

Bank Loan Search

COVID-19 Is Also a Reallocation Shock

Search Frictions, Credit Market Liquidity and Net Interest Margin Cyclicality

Contact Info

Product

Resources

About