TY - JOUR
T1 - The effect of cash injections
T2 - Evidence from the 1980s farm debt crisis
AU - Bergman, Nittai K.
AU - Iyer, Rajkamal
AU - Thakor, Richard T.
N1 - Publisher Copyright:
© The Author(s) 2020.
PY - 2020
Y1 - 2020
N2 - What is the effect of cash injections during financial crises? Exploiting county-level variation arising from random weather shocks during the 1980s Farm Debt Crisis, we analyze and measure the effect of local weather-driven cash flow shocks on the real and financial sectors. We show that such cash flow shocks significantly affect a host of economic outcomes, including land values, loan delinquency rates, the probability of bank failure, employment, and wages. Estimates of the effect of local cash flow shocks on county income levels during the financial crisis yield a multiplier of 1.63.
AB - What is the effect of cash injections during financial crises? Exploiting county-level variation arising from random weather shocks during the 1980s Farm Debt Crisis, we analyze and measure the effect of local weather-driven cash flow shocks on the real and financial sectors. We show that such cash flow shocks significantly affect a host of economic outcomes, including land values, loan delinquency rates, the probability of bank failure, employment, and wages. Estimates of the effect of local cash flow shocks on county income levels during the financial crisis yield a multiplier of 1.63.
UR - http://www.scopus.com/inward/record.url?scp=85101234837&partnerID=8YFLogxK
U2 - 10.1093/RFS/HHAA012
DO - 10.1093/RFS/HHAA012
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AN - SCOPUS:85101234837
SN - 0893-9454
VL - 33
SP - 5092
EP - 5130
JO - Review of Financial Studies
JF - Review of Financial Studies
IS - 11
ER -
