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Working Paper
Bank Lending Standards and the U.S. Economy
he provision of bank credit to firms and households affects macroeconomic performance. We use survey measures of changes in bank lending standards, disaggregated byloan category, to quantify the effect of changes in banks’ attitudes toward lending onaggregate output, inflation, and interest rates. Bank lending to businesses is particularlyimportant for macroeconomic outcomes, with peak effects on output of around half apercentage point after four quarters of the initial shock. These effects depend on thestage of the business cycle and the proximity of the short-term interest rate to its ...