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Economic Growth and Bank Innovation

Author

Listed:
  • Gary B. Gorton
  • Ping He

Abstract

Based on archival and survey data we show that the maturity of U.S. business loans has been continuously increasing since the mid-1930s when banks invented the term loan. Concurrently, bank innovation first involved the invention of credit analysis and covenant design. Later, bank innovation included the advent of loan sales, increased loan syndications, the opening of the leveraged loan market, and the securitization of loans in collateralized loan obligations. We estimate and calibrate a model of bank innovation to determine the quantitative contribution of bank innovation to economic growth.

Suggested Citation

  • Gary B. Gorton & Ping He, 2021. "Economic Growth and Bank Innovation," NBER Working Papers 29326, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29326
    Note: CF DAE EFG ME PR
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    File URL: http://www.nber.org/papers/w29326.pdf
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    Cited by:

    1. Yiping Huang & Xiang Li & Han Qiu & Changhua Yu, 2023. "Big tech credit and monetary policy transmission: micro-level evidence from China," BIS Working Papers 1084, Bank for International Settlements.
    2. Huang, Yiping & Li, Xiang & Qiu, Han & Yu, Changhua, 2023. "BigTech credit and monetary policy transmission: Micro-level evidence from China," BOFIT Discussion Papers 2/2023, Bank of Finland Institute for Emerging Economies (BOFIT).

    More about this item

    JEL classification:

    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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