Well-functioning credit markets play a key role in boosting overall
economic growth, but their impact on distributional outcomes
is much less clear. I use a quasi-experimental setting provided by
branch banking deregulation, an important episode of US financial
development, to study the distributive impacts of finance. Following
removal of geographic restrictions on banks in the 1980s and early
1990s, mortgage access increased for lower-middle income groups,
young, and also black households. These effects were driven by commercial banks, the only financial institutions subject to the policy.
Banks' new screening technologies may have been responsible for
this expansion of credit.
"The Distributive Impacts of Financial Development: Evidence from Mortgage Markets during US Bank Branch Deregulation."
American Economic Journal: Applied Economics,
Household Saving; Personal Finance
Personal Income, Wealth, and Their Distributions
Asset Pricing; Trading Volume; Bond Interest Rates
Financial Institutions and Services: Government Policy and Regulation