Footnote:
In: Journal of Banking and Finance, Forthcoming
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 17, 2017 erstellt
Description:
We find that bank liquidity creation (LC) is statistically and economically significantly positively related to real economic output (GDP). This is robust to using instrumental variables and many robustness checks. LC also beats bank assets in “horse races.” On-balance sheet LC matters more for small banks and off-balance sheet LC matters more for large banks. Small bank LC generates more GDP per dollar than large bank LC, but large bank LC matters more overall because large banks provide much more LC than small banks. The LC-output relation is strongest in bank-dependent industries, consistent with the hypothesized transmission mechanism