Non-performing loans and inefficient capital reallocation
Non-performing loans have been shown to negatively affect credit supply, investment, and growth. Countries that have struggled to recover from financial crisis typically have had higher and more persistent non-performing loan levels. While these empirical facts have been well established, neither the mechanisms causing the great cross-country heterogeneity in non-performing loan dynamics, nor the channels through which they affect the real economy are well understood. In this paper I propose a structural model with search frictions in secondary capital markets that can link slow capital reallocation and non-performing loans.
Date: 12 February 2021, 13:00 (Friday, 4th week, Hilary 2021)
Venue: Held on Zoom
Speaker: Philip Schnattinger (University of Oxford)
Organising department: Department of Economics
Part of: Macroeconomics Working Group
Booking required?: Not required
Audience: Members of the University only
Editor: Melis Clark