Work

Finance and Business Cycles: The Credit-Driven Household Demand Channel

Year: 2018

Type: report

Abstract: Every major financial crisis leaves its unique footprint on economic thought.The early banking crises taught us the importance of financial sector liquidity and the lender of last resort.The Great Depression highlighted the devastating effects of bank failures and the need for counter-cyclical fiscal and monetary policy.The Great Recession has brought to the surface the importance of credit-driven business cycles that operate through household demand.We discuss empirical evidence accumulated over the last decade supporting this view, and we also describe accompanying theoretical work that helps define these concepts.

Source: National Bureau of Economic Research

DOI: 10.3386/w24322

Authors: Atif Mian, Amir Sufi

Institutions: National Bureau of Economic Research, Princeton University, University of Chicago

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

Funder: Booth School of Business, University of Chicago

OpenAlex ID: W3122993403

Cites: 119

Cited by: 23

Related to: 10