Credit reallocation

Ana Maria Herrera, Marek Kolar, Raoul Minetti

Research output: Contribution to journalArticlepeer-review

22 Scopus citations

Abstract

A growing empirical literature finds that the allocation of credit across firms is as important as its total volume for economic performance. This paper investigates the process through which credit is reallocated across US businesses employing the methodology developed by Davis and Haltiwanger (1992) for the analysis of job reallocation. We find that credit reallocation is intense, highly volatile and moderately procyclical and that it primarily occurs across firms similar in size, industry or location. The results suggest that microeconomic heterogeneity can play a key role in the interaction between the credit market and the aggregate economy.

Original languageEnglish
Pages (from-to)551-563
Number of pages13
JournalJournal of Monetary Economics
Volume58
Issue number6-8
DOIs
StatePublished - Sep 2011

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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