Bank-specific shocks and the real economy
Governments often justify interventions into the financial system in the form of bail outs or liquidity assistance with the systemic importance of large banks for the real economy. In this paper, we analyze whether idiosyncratic shocks to loan growth at large banks have effects on real GDP growth. We employ a measure of idiosyncratic shocks which follows Gabaix (forthcoming). He shows that idiosyncratic shocks to large firms have an impact on US GDP growth. In an application to the banking sector, we find evidence that changes in lending by large banks have a significant short-run impact on GDP growth. Episodes of negative loan growth rates and the Eastern European countries in our sample drive these results.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Giovanni Dell'Ariccia & Raghuram Rajan & Enrica Detragiache, 2005.
"The Real Effect of Banking Crises,"
IMF Working Papers
05/63, International Monetary Fund.
- Xavier Gabaix, 2009.
"The Granular Origins of Aggregate Fluctuations,"
NBER Working Papers
15286, National Bureau of Economic Research, Inc.
- Blank, Sven & Buch, Claudia M. & Neugebauer, Katja, 2009.
"Shocks at large banks and banking sector distress: The Banking Granular Residual,"
Journal of Financial Stability,
Elsevier, vol. 5(4), pages 353-373, December.
- Blank, Sven & Buch, Claudia M. & Neugebauer, Katja, 2009. "Shocks at large banks and banking sector distress: the Banking Granular Residual," Discussion Paper Series 2: Banking and Financial Studies 2009,04, Deutsche Bundesbank, Research Centre.
- Markwat, T.D. & Kole, H.J.W.G. & van Dijk, D.J.C., 2008.
"Contagion as Domino Effect in Global Stock Markets,"
ERIM Report Series Research in Management
ERS-2008-071-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
- Markwat, Thijs & Kole, Erik & van Dijk, Dick, 2009. "Contagion as a domino effect in global stock markets," Journal of Banking & Finance, Elsevier, vol. 33(11), pages 1996-2012, November.
- Martin Schindler, 2009. "Measuring Financial Integration: A New Data Set," IMF Staff Papers, Palgrave Macmillan, vol. 56(1), pages 222-238, April.
- Paul Wachtel & Iftekhar Hasan & Mingming Zhou, 2007.
"Institutional Development, Financial Deepening and Economic Growth: Evidence from China,"
07-16, New York University, Leonard N. Stern School of Business, Department of Economics.
- Hasan, Iftekhar & Wachtel, Paul & Zhou, Mingming, 2009. "Institutional development, financial deepening and economic growth: Evidence from China," Journal of Banking & Finance, Elsevier, vol. 33(1), pages 157-170, January.
- Hasan, Iftekhar & Wachtel , Paul & Zhou, Mingming, 2006. "Institutional development, financial deepening and economic growth: Evidence from China," BOFIT Discussion Papers 12/2006, Bank of Finland, Institute for Economies in Transition.
- Hasan, Iftekhar & Wachtel, Paul & Zhou, Mingming, 2006. "Institutional development, financial deepening and economic growth : evidence from China," BOFIT Discussion Papers 12/2006, Bank of Finland, Institute for Economies in Transition.
- Simon Gilchrist & Ben S. Bernanke & Mark Gertler, 1994.
"The financial accelerator and the flight to quality,"
Finance and Economics Discussion Series
94-18, Board of Governors of the Federal Reserve System (U.S.).
- Bernanke, Ben & Gertler, Mark & Gilchrist, Simon, 1996. "The Financial Accelerator and the Flight to Quality," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 1-15, February.
- Ben Bernanke & Mark Gertler & Simon Gilchrist, 1994. "The Financial Accelerator and the Flight to Quality," NBER Working Papers 4789, National Bureau of Economic Research, Inc.
- Bernanke, Ben & Gertler, Mark & Gilchrist, Simon, 1994. "The Financial Accelerator and the Flight to Quality," Working Papers 94-24, C.V. Starr Center for Applied Economics, New York University.
- Andrei A. Levchenko & Julian di Giovanni, 2009.
"International Trade and Aggregate Fluctuations in Granular Economies,"
2009 Meeting Papers
491, Society for Economic Dynamics.
- Julian di Giovanni & Andrei A. Levchenko, 2009. "International Trade and Aggregate Fluctuations in Granular Economies," Working Papers 585, Research Seminar in International Economics, University of Michigan.
- Hasman, Augusto & Samartín, Margarita, 2008. "Information acquisition and financial contagion," Journal of Banking & Finance, Elsevier, vol. 32(10), pages 2136-2147, October.
- Ben S. Bernanke & Alan S. Blinder, 1988.
"Credit, Money, and Aggregate Demand,"
NBER Working Papers
2534, National Bureau of Economic Research, Inc.
- Alessandra Bonfiglioli & Caterina Mendicino, 2004.
"Financial liberalization, bank crises and growth: Assessing the links,"
Economics Working Papers
946, Department of Economics and Business, Universitat Pompeu Fabra.
- Alessandra Bonfiglioli & Caterina Mendicino, 2005. "Financial Liberalization, Bank Crises and Growth: Assessing the links," Departmental Working Papers of Economics - University 'Roma Tre' 0044, Department of Economics - University Roma Tre.
- Xavier Gabaix, 2009.
"Power Laws in Economics and Finance,"
Annual Review of Economics,
Annual Reviews, vol. 1(1), pages 255-294, 05.
- Jeremy C. Stein & Anil K. Kashyap, 2000. "What Do a Million Observations on Banks Say about the Transmission of Monetary Policy?," American Economic Review, American Economic Association, vol. 90(3), pages 407-428, June.
- Kroszner, Randall S. & Laeven, Luc & Klingebiel, Daniela, 2007.
"Banking crises, financial dependence, and growth,"
Journal of Financial Economics,
Elsevier, vol. 84(1), pages 187-228, April.
- Nikola Tarashev & Claudio Borio & Kostas Tsatsaronis, 2009. "The systemic importance of financial institutions," BIS Quarterly Review, Bank for International Settlements, September.
When requesting a correction, please mention this item's handle: RePEc:eee:jbfina:v:35:y:2011:i:8:p:2179-2187. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.