Falling Interest Rates and Credit Reallocation: Lessons from General Equilibrium

• 成果类型: Article
• 署名作者: Asriyan, Vladimir; Laeven, Luc; Martin, Alberto; Van der Ghote, Alejandro; Vanasco, Victoria
• 署名单位: ICREA; Pompeu Fabra University; Centre de Recerca en Economia Internacional (CREI); Barcelona School of Economics; European Central Bank; Centre de Recerca en Economia Internacional (CREI); Pompeu Fabra University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdae065
• 发表日期: 2025
• 页码: 2197-2227
• 关键词: monetary-policy; shocks; PRODUCTIVITY; INVESTMENT; channel; frictions; banks; LEVEL; MODEL

摘要

We show that in a canonical model with heterogeneous entrepreneurs, financial frictions, and an imperfectly elastic supply of capital, a fall in the interest rate has an ambiguous effect on aggregate economic activity. In partial equilibrium, a lower interest rate raises aggregate investment both by relaxing financial constraints and by prompting relatively less productive entrepreneurs to invest. In general equilibrium, however, this higher demand for capital raises its price and crowds out investment by more productive entrepreneurs. When this reallocation is strong enough, a fall in the interest rate reduces aggregate output. A numerical exploration of the model suggests that this reallocation effect is quantitatively significant and-in response to persistent changes in the interest rate-stronger than the traditional balance-sheet channel. We provide evidence of the reallocation effect using U.S. firm-level data.