
ECOBAS Research Seminar: Tiago Tavares – ITAM (México). Friday, February 18
Investment Slumps During Financial Crises: The Real Effects of Credit Supply
Friday, February 18, 13.00h (CET)
VIRTUAL SEMINAR
https://zoom.us/j/96255626521?pwd=bE5LdnlkL0Y1MVRLOFNxSjVnR3dtUT09
- Meeting ID: 962 5562 6521
- Acess code: 013785
The seminar language will be English.
ABSTRACT:
Using new census-type data and a dynamic structural model, we study the effect of credit supply on investment by manufacturing firms during the Greek depression. Real factors (profitability, uncertainty, and taxes) account for only a fraction of the substantial drop in investment observed in the data. The reduction in credit supply has significant real effects, explaining 11–32% of the investment slump. We also find that exporting firms, which reduce investment and deleverage despite their improved profitability during the crisis, face a contraction in credit supply similar to that of non-exporters, suggesting that the credit-supply shock has a significant common component.
More info about the speaker
ABSTRACT:
Using new census-type data and a dynamic structural model, we study the effect of credit supply on investment by manufacturing firms during the Greek depression. Real factors (profitability, uncertainty, and taxes) account for only a fraction of the substantial drop in investment observed in the data. The reduction in credit supply has significant real effects, explaining 11–32% of the investment slump. We also find that exporting firms, which reduce investment and deleverage despite their improved profitability during the crisis, face a contraction in credit supply similar to that of non-exporters, suggesting that the credit-supply shock has a significant common component.
More info about the speaker