Growing Like Germany: Local Public Debt, Local Banks, Low Private Investment
نویسندگان
چکیده
Using a firm-bank panel of more than 1m German firms over 2010-2016, we document that local public bank lending to municipalities crowds out private investment. Our results show how crowding-out can happen in developed economy characterized by low interest rates and fiscal austerity. mechanism relies on two structural features Germany’s banking landscape: First, the geographical segmentation credit markets for small medium (SME) which are dominated banks. Secondly, special statutory mandate requiring banks lend municipalities. With yields government debt declining all-time lows, tried alleviate stress their balance sheets using market power charge higher SME customers. This crowded firm Perversely, consolidation at state federal levels contributed this effect putting pressure budgets municipal governments increasingly borrowed from Crowding-out lowered aggregate investment around 30-40 bio euros per year (or 1 percent GDP). Thus, identify novel channel through adversely affect performance. also illustrate segmented amplify negative multiplier effects
منابع مشابه
Local Public Investment and Debt Limitation in a Federation
The paper considers the local provision of public infrastructure when population is mobile. It shows that inflexible deficit limitation may result in too little local public investment if population is perfectly mobile in the long run. Conversely, given the existence of migration externalities, implementing Musgrave's pay as you use finance, according to which new debt should match net investme...
متن کاملFinancing Investment: The Choice between Public and Private Debt∗
We study the choice between public and private debt in a firm’s marginal financing decision and its effects on corporate investment. To do so, we build a dynamic model of investment and financing decisions in which firms can choose not only the amount but also the type of debt to issue to finance investment. The paper shows how various firm and industry characteristics, such as liquidation cost...
متن کاملDifferentially Private Local Electricity Markets
Privacy-preserving electricity markets have a key role in steering customers towards participation in local electricity markets by guarantying to protect their sensitive information. Moreover, these markets make it possible to statically release and share the market outputs for social good. This paper aims to design a market for local energy communities by implementing Differential Privacy (DP)...
متن کاملIncome Inequality, Sovereign Debt, and Public Investment
We develop a political-economic model of sovereign debt that shows that income inequality leads to popular pressures on the government to use foreign debt to Þnance a redistribution of income at the expense of productive public investment. Recognizing this fact international lenders impose credit ceilings with the consequence that developing country borrowers invest less and grow slower. ∗We ar...
متن کاملUmbilical cord blood banks. Ethical aspects. Public versus private banks.
The creation of umbilical cord blood (UCB) banks raises interesting medical, social, economic and ethical issues. This paper reviews the ethical problems specifically. In this respect, it evaluates: a) whether there are advantages to the use of UCB compared to bone marrow, b) whether or not it is ethical to create UCB banks, c) whether their creation is ethically acceptable in terms of their cl...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Social Science Research Network
سال: 2022
ISSN: ['1556-5068']
DOI: https://doi.org/10.2139/ssrn.4197750