We investigate the role played by the credit supply shock across the business cycle in the U.S. over the period 1973 … credit supply shock triggers asymmetric and negative effects on macroeconomic variables. We find that the state …-dependent forecast error variance decomposition of industrial production, employment, and inflation due to the shock is from six to eight …

supply shock using micro-level data from a multinational bank. Borrowers with stronger lending relationships, higher non …. Consistent with a tightening of financing constraints post shock, borrower composition shifts toward larger and less risky firms …