Gross credit flows, credit reallocation, and the macroeconomy

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This project aims to construct measures of credit reallocation from regulatory bank-level data for Australia and other countries. The project intends to develop empirical models able to evaluate the role of credit reallocation on aggregate output and a theoretical model with search and match frictions to evaluate quantitatively the role of bank credit in explaining macroeconomic outcomes. The project expects to provide significant benefits for policymakers for assessing the interplay between monetary and credit policy, formulating macroeconomic and macro prudential policies, and shedding light on the causes of productivity dynamics in Australia, boosting its comparative advantage.