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The Economic Effects of a Borrower Bailout: Evidence from an Emerging Market

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  • Xavier Gene
  • Martin Kanz

Abstract

The credit market implications and real effects of one the largest borrower bailout programs in history are studied, enacted by the government of India against the backdrop of the 2008–2009 financial crisis. The stimulus program had no effect on productivity, wages or consumption, but led to significant changes in credit allocation and an increase in defaults.

Suggested Citation

  • Xavier Gene & Martin Kanz, 2014. "The Economic Effects of a Borrower Bailout: Evidence from an Emerging Market," Working Papers id:6275, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:6275
    Note: Institutional Papers
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    2. Ma, Chang & Nguyen, Xuan-Hai, 2021. "Too big to fail and optimal regulation," International Review of Economics & Finance, Elsevier, vol. 75(C), pages 747-758.
    3. Saibal Ghosh, 2023. "Political connections and bank behaviour," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 52(1), February.
    4. Ajay Shah, 2023. "The journey of Indian finance," Working Papers 25, xKDR.
    5. Kumar, Nitish, 2020. "Political interference and crowding out in bank lending," Journal of Financial Intermediation, Elsevier, vol. 43(C).
    6. World Bank, "undated". "South Asia Economic Focus, Spring 2020," World Bank Publications - Reports 33478, The World Bank Group.
    7. Liu, Zihua & Zhou, Sili, 2022. "Political favoritism towards resource allocation: Evidence of grants by natural science foundation in China," Emerging Markets Review, Elsevier, vol. 51(PA).
    8. André Albuquerque Sant’Anna & Lucas Costa, 2019. "Bailing out environmental liabilities: moral hazard and deforestation in the Brazilian Amazon," Documentos de Trabajo 17435, The Latin American and Caribbean Economic Association (LACEA).

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