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How Bank Lending Standards Shape the U.S. Macroeconomy

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Abstract

Changes in lending standards affect GDP performance, with changes to business lending standards having a greater impact on overall U.S. economic growth than changes to household lending standards. The tightening of business lending standards is associated with a significant and persistent drop in real GDP growth. The magnitude of the effect depends on economic conditions, as it is significantly stronger when GDP is below its long-run trend, interest rates are away from their effective lower bound or economic uncertainty is elevated. A tightening of bank lending standards has a larger, more immediate negative impact on GDP growth than the positive effect of an easing in lending standards.

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  • Huberto M. Ennis & Horacio Sapriza, 2026. "How Bank Lending Standards Shape the U.S. Macroeconomy," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, vol. 26(31), September.
    • Handle: RePEc:fip:fedreb:103808
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    File URL: https://www.richmondfed.org/publications/research/economic_brief/2026/eb_26-31
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