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Working Paper
The Opioid Epidemic and Consumer Credit Supply: Evidence from Credit Cards
Using a unique data set of unsolicited credit card offer mailings by banks to consumers, we investigate how opioid abuse affects consumer credit supply in the U.S. To identify causal effects, we employ instrumental variables, propensity score matching, and contiguous counties techniques and control for varying local economic conditions and demographics. We find that banks contract credit supply to consumers in counties highly exposed to opioid abuse by offering higher interest rates, lower credit card limits, and fewer rewards and reducing credit offers overall. Further analyses using the ...
Working Paper
Policy Externalities and Banking Integration
Can policies directed at the banking sector in one jurisdiction spill over and affect real economic activity elsewhere? To investigate this question, I exploit changes in tax rates on bank profits across U.S. states. Banks respond by reallocating small-business lending to otherwise unaffected states. Moreover, counties in non-tax-changing states that have more exposure to treated banks experience greater changes in lending, which in turn impacts local employment. The findings demonstrate that policies aimed at the banking sector in one jurisdiction can impose externalities on other regions. ...
Journal Article
The Lasting Damage from the Financial Crisis to U.S. Productivity
Michael Redmond and Willem Van Zandweghe find that tight credit conditions during the 2007?09 financial crisis dampened productivity, leaving it on a lower trajectory.
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 ...