Collateral Damage: Effects of the Japanese Bank Crisis on Real Activity in the United States
Peek, Joe, and
Eric S. Rosengren. 2000. "Collateral Damage: Effects of the Japanese Bank Crisis on Real Activity in the United States."
American Economic Review,
The Japanese banking crisis provides a natural experiment to test whether a loan supply shock can affect real economic activity. Because the shock was external to U.S. credit markets, yet connected through the Japanese bank penetration of U.S. markets, this event allows us to identify an exogenous loan supply shock and ultimately link that shock to construction activity in U.S. commercial real estate markets. We exploit the variation across geographically distinct commercial real estate markets to establish conclusively that loan supply shocks emanating from Japan had real effects on economic activity in the United States.
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Peek, Joe (Boston College)
Rosengren, Eric S. (Federal Reserve Bank of Boston)
G21: Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
E44: Financial Markets and the Macroeconomy