This paper suggests a new channel through which central bank Quantitative Easing (QE) policies can amplify aggregate fluctuations. By significantly increasing excess reserve holdings in the banking sector, QE policies reduce liquidity risk and increase banks' lending potential. Thus,...

This paper studies how changes in household credit affect small business lending. First, we build a closed economy model that examines two opposing channels: a negative crowding out effect and a positive collateral effect. Our analysis shows that, following a household credit expansion, the...

We present new measures of monetary policy shocks for India using high-frequency data, creating a publicly available event study dataset as a byproduct. In addition to capturing surprises to the Reserve Bank of India's (RBI) policy rate, our shocks suggest that financial markets infer...