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Lending cycles

Listed author(s):
  • Asea, Patrick K.
  • Blomberg, Brock

We investigate the lending behavior of banks by exploiting a rich oanel dataset on the contract terms of approximately two million commercial and industrial loans granted by 580 banks between 1977-1993. Using a Markov switching panel model we demonstrate that banks change their lending standards - from tightness to laxity - systematically over the cycle. We then use an efficient minimum chi-square estimator.

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Article provided by Elsevier in its journal Journal of Econometrics.

Volume (Year): 83 (1998)
Issue (Month): 1-2 ()
Pages: 89-128

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Handle: RePEc:eee:econom:v:83:y:1998:i:1-2:p:89-128
Contact details of provider: Web page: http://www.elsevier.com/locate/jeconom

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