The financial transmission of housing booms evidence from Spain by Alberto Martín, Enrique Moral-Benito, Tom Schmit
By: Martín Moreno, Alberto
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Contributor(s): Moral Benito, Enrique | Schmitz, Tom.
Material type: 
ArticlePublisher: 2021Subject(s): BANCOS | CREDITOS BANCARIOS | EMPRESAS | VIVIENDA | PRESTAMOS HIPOTECARIOS | ESPAÑA | MODELOS ECONOMETRICOS
In:
The American Economic Review v. 111, n. 3, March 2021, p. 1013-1053Summary: How does a housing boom affect credit to non-housing firms? Using bank, firm, and loan-level microdata, we show that the Spanish housing boom reduced non-housing credit growth during its first years, but stimulated it later on. These patterns can be rationalized by financial constraints for banks. Constrained banks initially accommodated higher housing credit demand by reducing non-housing credit. Eventually, however, the housing boom increased bank net worth and expanded credit supply. A quantitative model, disciplined by our cross-sectional estimates, indicates that the crowding-out effect was substantial but temporary, and had been fully absorbed by the end of the boom.
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| OP 234/2021/2 The American Economic Review | OP 234/2021/2-1 Intertemporal labor supply substitution ? | OP 234/2021/3 The American Economic Review | OP 234/2021/3-1 The financial transmission of housing booms | OP 234/2021/4 The American Economic Review | OP 234/2021/5 The American Economic Review | OP 234/2021/5 (Congreso anual) The American Economic Review |
Resumen.
Bibliografía.
How does a housing boom affect credit to non-housing firms? Using bank, firm, and loan-level microdata, we show that the Spanish housing boom reduced non-housing credit growth during its first years, but stimulated it later on. These patterns can be rationalized by financial constraints for banks. Constrained banks initially accommodated higher housing credit demand by reducing non-housing credit. Eventually, however, the housing boom increased bank net worth and expanded credit supply. A quantitative model, disciplined by our cross-sectional estimates, indicates that the crowding-out effect was substantial but temporary, and had been fully absorbed by the end of the boom.
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