Fiscal Policy and Credit Supply in a Crisis

• 成果类型: Article
• 署名作者: Bonfim, Diana; Ferreira, Miguel A.; Queiro, Francisco; Zhao, Sujiao (Emma)
• 署名单位: Banco de Portugal; European Central Bank; Universidade Catolica Portuguesa; Universidade Nova de Lisboa; Universidade do Porto
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20221499
• 发表日期: 2025
• 页码: 1896-1935
• 关键词: stimulus; default; errors; banks; debt

摘要

We measure how cuts to public procurement propagate through the banking system in a financial crisis. During the European sovereign debt crisis, the Portuguese government cut procurement spending by 4.3 percent of GDP. We find that this cut saddled banks with nonperforming loans from government contractors, which led to a persistent reduction in credit supply to other firms. We estimate a bank-level elasticity of credit supply with respect to procurement demand of 2.5. In a general equilibrium model, our findings point to large effects of fiscal policy on credit supply and output in a crisis.