Lending standards, productivity and credit crunches / by Jonathan Swarbrick.: FB3-5/2019-25E-PDF
"We propose a macroeconomic model in which adverse selection in investment drives the amplification of macroeconomic fluctuations, in line with prominent roles played by the credit crunch and collapse of the asset-backed security market in the financial crisis. Endogenous lending standards emerge due to an informational asymmetry between borrowers and lenders about the riskiness of borrowers. By using loan approval probability as a screening device, banks ration credit following financial disturbances, generating large endogenous movements in total factor productivity, explaining why productivity often falls during crises. Furthermore, the mechanism implies that financial instability is heightened when interest rates are low"--Abstract, page ii.
Permanent link to this Catalogue record:
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| Department/Agency | Bank of Canada. |
|---|---|
| Title | Lending standards, productivity and credit crunches / by Jonathan Swarbrick. |
| Series title | Bank of Canada staff working paper, 1701-9397 ; 2019-25 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | "July 2019." Includes bibliographical references (pages 27-31). Includes abstracts in English and French. |
| Publishing information | Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2019. ©2019 |
| Author / Contributor | Swarbrick, Jonathan M., author. |
| Description | 1 online resource (iii, 36 pages) : charts (some colour). |
| Catalogue number |
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| Subject terms | Credit Interest rates Productivity |
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