The Collateral Channel : How Real Estate Shocks affect Corporate Investment ∗ Job Market Paper

@inproceedings{Chaney2008TheCC,
  title={The Collateral Channel : How Real Estate Shocks affect Corporate Investment ∗ Job Market Paper},
  author={Thomas A. Chaney and David Sraer and David Thesmar},
  year={2008}
}
What is the impact of real estate prices on corporate investment? In the presence of financing frictions, firms use pledgeable assets as collateral to finance new projects. Through this collateral channel, shocks to the value of real estate can have a large impact on aggregate investment. Over the 1993-2007 period, the representative U.S. corporation… CONTINUE READING