Caballero, Ricardo J.; Hoshi, Takeo; Kashyap, Anil K. - In: American Economic Review 98 (2008) 5, pp. 1943-77
Large Japanese banks often engaged in sham loan restructurings that kept credit flowing to otherwise insolvent borrowers (which we call zombies). We examine the implications of suppressing the normal competitive process whereby the zombies would shed workers and lose market share. The congestion...