competitive credit market only after good shocks. This prediction is shown to be consistent with data on emerging market economies …

financial intermediation with credit and liquidity frictions. The precautionary liquidity shock is shown to work through two …This paper identifies a precautionary banking liquidity shock via a set of sign, zero and forecast variance … restrictions imposed. The shock proxies the reluctance of the banking sector to "lend" to the real economy induced by an exogenous …

Consumer credit spreads significantly impact consumption and asset dynamics, affecting indebted households' spending … behavior and the income sensitivity of consumption. Analyzing Danish data, we find that elevated credit spreads reduce … credit spreads playing a crucial role. We develop a HANK model, incorporating bank financing for both firms and households …