Fiscal Policy and Credit Supply: The Procurement Channel

Detalhes bibliográficos
Autor(a) principal: Bonfim, Diana
Data de Publicação: 2021
Outros Autores: Ferreira, Miguel A., Queiró, Francisco, Sujiao (Emma), Zhao
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10362/143356
Resumo: We measure how cuts to public procurement propagate through the banking system in a financial crisis. During the European sovereign debt crisis, the Portuguese government cut procurement spending by 4.3% of GDP.We find that this cut saddled banks with non-performing loans from government contractors, which led to a reduction in credit supply to other firms. The credit supply shock, in turn, caused firm output to decline. In a general equilibrium model, our firm-level estimates imply an aggregate elasticity of credit supply with respect to aggregate demand of 1.6 and a credit-driven fiscal multiplier of 0.6.
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spelling Fiscal Policy and Credit Supply: The Procurement ChannelCredit supplyGovernment procurementInvestmentEmploymentFinancial crisisBank-sovereign loopAusterityWe measure how cuts to public procurement propagate through the banking system in a financial crisis. During the European sovereign debt crisis, the Portuguese government cut procurement spending by 4.3% of GDP.We find that this cut saddled banks with non-performing loans from government contractors, which led to a reduction in credit supply to other firms. The credit supply shock, in turn, caused firm output to decline. In a general equilibrium model, our firm-level estimates imply an aggregate elasticity of credit supply with respect to aggregate demand of 1.6 and a credit-driven fiscal multiplier of 0.6.Nova School of Business and EconomicsRUNBonfim, DianaFerreira, Miguel A.Queiró, FranciscoSujiao (Emma), Zhao2022-08-30T12:09:24Z2021-06-152021-06-15T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10362/143356engBonfim, Diana, Ferreira, Miguel A., Queiró, Francisco, Zhao, Sunjiao. Fiscal Policy and Credit Supply: The Procurement Channel. (November 2022) Nova SBE Working Paper Series No. 644info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-03-11T05:21:40Zoai:run.unl.pt:10362/143356Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T03:50:54.003266Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Fiscal Policy and Credit Supply: The Procurement Channel
title Fiscal Policy and Credit Supply: The Procurement Channel
spellingShingle Fiscal Policy and Credit Supply: The Procurement Channel
Bonfim, Diana
Credit supply
Government procurement
Investment
Employment
Financial crisis
Bank-sovereign loop
Austerity
title_short Fiscal Policy and Credit Supply: The Procurement Channel
title_full Fiscal Policy and Credit Supply: The Procurement Channel
title_fullStr Fiscal Policy and Credit Supply: The Procurement Channel
title_full_unstemmed Fiscal Policy and Credit Supply: The Procurement Channel
title_sort Fiscal Policy and Credit Supply: The Procurement Channel
author Bonfim, Diana
author_facet Bonfim, Diana
Ferreira, Miguel A.
Queiró, Francisco
Sujiao (Emma), Zhao
author_role author
author2 Ferreira, Miguel A.
Queiró, Francisco
Sujiao (Emma), Zhao
author2_role author
author
author
dc.contributor.none.fl_str_mv RUN
dc.contributor.author.fl_str_mv Bonfim, Diana
Ferreira, Miguel A.
Queiró, Francisco
Sujiao (Emma), Zhao
dc.subject.por.fl_str_mv Credit supply
Government procurement
Investment
Employment
Financial crisis
Bank-sovereign loop
Austerity
topic Credit supply
Government procurement
Investment
Employment
Financial crisis
Bank-sovereign loop
Austerity
description We measure how cuts to public procurement propagate through the banking system in a financial crisis. During the European sovereign debt crisis, the Portuguese government cut procurement spending by 4.3% of GDP.We find that this cut saddled banks with non-performing loans from government contractors, which led to a reduction in credit supply to other firms. The credit supply shock, in turn, caused firm output to decline. In a general equilibrium model, our firm-level estimates imply an aggregate elasticity of credit supply with respect to aggregate demand of 1.6 and a credit-driven fiscal multiplier of 0.6.
publishDate 2021
dc.date.none.fl_str_mv 2021-06-15
2021-06-15T00:00:00Z
2022-08-30T12:09:24Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10362/143356
url http://hdl.handle.net/10362/143356
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Bonfim, Diana, Ferreira, Miguel A., Queiró, Francisco, Zhao, Sunjiao. Fiscal Policy and Credit Supply: The Procurement Channel. (November 2022) Nova SBE Working Paper Series No. 644
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Nova School of Business and Economics
publisher.none.fl_str_mv Nova School of Business and Economics
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
repository.mail.fl_str_mv
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