Government Borrowing and Crowding Out

• 成果类型: Article
• 署名作者: Onder, Yasin Kursat; Restrepo-Tamayo, Sara; Ruiz-Sanchez, Maria Alejandra; Villamizar-Villegas, Mauricio
• 署名单位: Ghent University; Universidad del Rosario; Banco de la Republica Colombia
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20200273
• 发表日期: 2024
• 页码: 286-321
• 关键词: monetary-policy; public debt; shocks

摘要

We investigate the impact of fiscal expansions on firm investment by exploiting firms with multiple banking relationships. Further, we conduct a localized approach and compare the lending behavior of banks that barely met and missed the criteria of being a primary dealer, as well as barely winners and losers at government auctions. Our results indicate that a 1 percentage point increase in primary dealer banks' bonds -to -assets ratio decreases loans by 0.2 percent, which leads to declines in firm investment, profits, and wages. Our findings are grounded in a quantitative model with which we compute the cost of borrowing on the economy. (JEL D22, E12, E23, G21, G32, H63, O11)