Search results for " credit constraints"

Holes in the Dike: the global savings glut, U.S. house prices and the long shadow of banking deregulation

2015

We explore empirically how capital inflows into the US and financial deregulation within the United States interacted in driving the run-up (and subsequent decline) in US housing prices over the period 1990-2010. To obtain an ex ante measure of financial liberalization, we focus on the history of interstate-banking deregulation during the 1980s, i.e. prior to the large net capital inflows into the US from China and other emerging economies. Our results suggest a long shadow of deregulation: in states that opened their banking markets to out-of-state banks earlier, house prices were more sensitive to capital inflows. We provide evidence that global imbalances were a major positive funding sh…

The recourse to trade credit by Italian firms during the crisis

rade credit, for many firms, is an essential tool for financing growth. Trade credit indicates a practise to buy goods or services on account without making immediate cash payment. Although trade credit is an important source of funds for small businesses, little has been known about the reasons business customers use it. Economists have linked the use of trade credit to transaction and financing motive. The use of trade credit because credit from other sources, particularly from financial institutions, is limited during recession periods represents a reasonable motive. In order to verify if Italian firms faced to credit restrictions by recurring more intensively to trade credit, we examine…