The effect of cash injections: Evidence from the 1980s farm debt crisis

Nittai K. Bergman; Rajkamal Iyer; Richard T. Thakor

doi:10.1093/RFS/HHAA012

The effect of cash injections: Evidence from the 1980s farm debt crisis

Nittai K. Bergman, Rajkamal Iyer, Richard T. Thakor

School of Economics

Tel Aviv University

Research output: Contribution to journal › Review article › peer-review

Abstract

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.

Original language	English
Pages (from-to)	5092-5130
Number of pages	39
Journal	Review of Financial Studies
Volume	33
Issue number	11
DOIs	https://doi.org/10.1093/RFS/HHAA012
State	Published - 2020

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 10 Reduced Inequalities

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics and Econometrics

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10.1093/RFS/HHAA012

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title = "The effect of cash injections: Evidence from the 1980s farm debt crisis",

abstract = "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.",

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doi = "10.1093/RFS/HHAA012",

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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.

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U2 - 10.1093/RFS/HHAA012

DO - 10.1093/RFS/HHAA012

M3 - مقالة مرجعية

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ER -

The effect of cash injections: Evidence from the 1980s farm debt crisis

Abstract

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