Publication:
Crisis Credit, Employment Protection, Indebtedness, and Risk

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dc.contributor.authorHuneeus, Federico
dc.contributor.authorKaboski, Joseph P.
dc.contributor.authorLarrain, Mauricio
dc.contributor.authorSchmukler, Sergio L.
dc.contributor.authorVera, Mario
dc.date.accessioned2024-10-25T16:19:39Z
dc.date.available2024-10-25T16:19:39Z
dc.date.issued2024-10-25
dc.description.abstractThis paper studies how credit guarantee and employment protection programs interact in assisting firms during crises times. The paper analyzes how these government programs influence credit allocation, indebtedness, and risk at both the micro and macro levels. The programs provide different incentives for firms. The low interest rate encourages riskier firms to demand government-backed credit, while banks tend to reject those credit applications. The credit demand outweighs this screening supply response, expanding micro-level indebtedness across the extensive and intensive margins among riskier firms. The uptake of the employment program is not associated with risk, as firms internalize the opportunity cost of reduced operations when sending workers home to qualify for assistance. The employment program mitigates the indebtedness expansion of the credit program by supporting firms and enabling banks to screen firms better. Macroeconomic risk of the credit program would increase by a third without the availability of the employment program.en
dc.identifierhttp://documents.worldbank.org/curated/en/099556010242449862/IDU119d522dc1a2ca14e371a56b11a846355f2a7
dc.identifier.doi10.1596/1813-9450-10958
dc.identifier.urihttps://hdl.handle.net/10986/42301
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesPolicy Research Working Paper; 10958
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectBANKING
dc.subjectCREDIT DEMAND
dc.subjectCREDIT SUPPLY
dc.subjectCRISES
dc.subjectCOVID-19
dc.subjectDEBT
dc.subjectEMPLOYMENT PROTECTION
dc.subjectFIRM RISK
dc.subjectMACROECONOMIC RISK
dc.subjectPUBLIC CREDIT GUARANTEES
dc.subjectDECENT WORK AND ECONOMIC GROWTH
dc.subjectSDG 8
dc.subjectPEACE, JUSTICE AND STRONG INSTITUTIONS
dc.subjectSDG 16
dc.titleCrisis Credit, Employment Protection, Indebtedness, and Risken
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleCrisis Credit, Employment Protection, Indebtedness, and Risk
okr.date.disclosure2024-10-25
okr.date.lastmodified2024-10-24T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099556010242449862/IDU119d522dc1a2ca14e371a56b11a846355f2a7
okr.guid099556010242449862
okr.identifier.docmidIDU-19d522dc-a2ca-4e37-a56b-1a846355f2a7
okr.identifier.doi10.1596/1813-9450-10958
okr.identifier.doihttps://doi.org/10.1596/1813-9450-10958
okr.identifier.externaldocumentum34411082
okr.identifier.internaldocumentum34411082
okr.identifier.reportWPS10958
okr.import.id5564
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099556010242449862/pdf/IDU119d522dc1a2ca14e371a56b11a846355f2a7.pdfen
okr.region.geographicalWorld
okr.topicGovernance::Governance and the Financial Sector
okr.topicFinance and Financial Sector Development::Banks & Banking Reform
okr.topicFinance and Financial Sector Development::Finance and Development
okr.unitDCRCL
okr.unitDECRG: Macroeconomics & Growth (DECMG)
relation.isAuthorOfPublicationad1ad457-a974-53de-815c-c7010e0fdd74
relation.isAuthorOfPublication.latestForDiscoveryad1ad457-a974-53de-815c-c7010e0fdd74
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
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