This paper studies the role of credit in the business cycle, with a focus on private credit overhang. Based on a study …; and for both types of recession, more credit-intensive expansions tend to be followed by deeper recessions and slower … controls and their lags. Then we study how past credit accumulation impacts the behavior of not only output but also other key …

. This fact is robust to numerous controls for credit quality, industry, and business owner characteristics. The heavy … reliance on external debt underscores the importance of well functioning credit markets for the success of nascent business …

In advanced economies, a century-long near-stable ratio of credit to GDP gave way to rapid financialization and surging …

corporate credit risk relative to the US, and when european firms value more than US firms the flexibility and information …

This paper looks at the effect of credit constraints on skill acquisition when agents have heterogeneous abilities and … wealth. We use a two factor general equilibrium model and assume credit markets are absent. We explore the effects of trade …

We provide evidence that credit lines offer liquidity insurance to borrowers. Borrowers are able to extensively use … their credit lines in recessions and ahead of credit line cuts. In fact drawdowns and changes in drawdowns predict internal … credit rating downgrades and credit line cuts, suggesting substantial liquidity access before credit line cuts. Credit line …

cash reserves or bank lines of credit. Banks create liquidity for firms by pooling their idiosyncratic risks. As a result …, firms with high aggregate risk find it costly to get credit lines from banks and opt for cash reserves in spite of higher … have a higher ratio of cash reserves to lines of credit, controlling for other determinants of liquidity policy. This …

Intuition suggests that firms with higher cash holdings are safer and should have lower credit spreads. Yet empirically …, the correlation between cash and spreads is robustly positive and higher for lower credit ratings. This puzzling finding … are positively related to credit risk, resulting in a positive correlation between cash and spreads. In contrast, spreads …