The Distributive Impacts of Financial Development: Evidence from Mortgage Markets during US Bank Branch Deregulation
- (pp. 175-96)
Abstract
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.Citation
Tewari, Ishani. 2014. "The Distributive Impacts of Financial Development: Evidence from Mortgage Markets during US Bank Branch Deregulation." American Economic Journal: Applied Economics, 6 (4): 175-96. DOI: 10.1257/app.6.4.175Additional Materials
JEL Classification
- D14 Household Saving; Personal Finance
- D31 Personal Income, Wealth, and Their Distributions
- G12 Asset Pricing; Trading Volume; Bond Interest Rates
- G28 Financial Institutions and Services: Government Policy and Regulation
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