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dc.contributor.authorSwarbrick, Jonathan
dc.date.accessioned2021-11-17T13:30:02Z
dc.date.available2021-11-17T13:30:02Z
dc.date.issued2021-11-15
dc.identifier.citationSwarbrick , J 2021 , ' Lending standards, productivity, and credit crunches ' , Macroeconomic Dynamics , vol. First View . https://doi.org/10.1017/S1365100521000481en
dc.identifier.issn1365-1005
dc.identifier.otherPURE: 275294729
dc.identifier.otherPURE UUID: f543c6a2-7e4f-4f79-a210-551702074423
dc.identifier.otherScopus: 85119677967
dc.identifier.otherWOS: 000776829900001
dc.identifier.urihttp://hdl.handle.net/10023/24349
dc.descriptionThis paper was based on a doctoral thesis chapter; the financial support by the Economic and Social Research Council [grant number ES/J500148/1] during this time is gratefully acknowledged.en
dc.description.abstractWe propose a macroeconomic model in which adverse selection in investment amplifies macroeconomic fluctuations, in line with the prominent role played by the credit crunch during 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 increases in lending risk, generating large endogenous movements in TFP, explaining why productivity often falls during crises. Furthermore, the mechanism implies that financial instability is heightened when interest rates are low.
dc.format.extent26
dc.language.isoeng
dc.relation.ispartofMacroeconomic Dynamicsen
dc.rightsCopryight © The Author(s), 2021. Published by Cambridge University Press. This work has been made available online in accordance with publisher policies or with permission. Permission for further reuse of this content should be sought from the publisher or the rights holder. This is the author created accepted manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://doi.org/10.1017/S1365100521000481en
dc.subjectAdverse selectionen
dc.subjectCredit frictionsen
dc.subjectTotal factor productivityen
dc.subjectBusiness cyclesen
dc.subjectCredit crunchesen
dc.subjectLending standardsen
dc.subjectLow interest ratesen
dc.subjectHB Economic Theoryen
dc.subjectT-NDASen
dc.subjectACen
dc.subject.lccHBen
dc.titleLending standards, productivity, and credit crunchesen
dc.typeJournal articleen
dc.description.versionPostprinten
dc.contributor.institutionUniversity of St Andrews. School of Economics and Financeen
dc.identifier.doihttps://doi.org/10.1017/S1365100521000481
dc.description.statusPeer revieweden
dc.date.embargoedUntil2021-11-15


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