On Wednesday, I showed investment activity in various recessions, and noted how investment during this recession -- despite its alleged origins in a credit crunch -- has been doing better than in previous recessions.
Today Professor Perry looked at consumer loans, and found them to be increasing during this recession, while they fell during previous recessions.
Can we end the credit crunch myth now?
[added: Karl cautions against interpreting those as aggregate consumer loans]
I think that chart is showing consumer loans held by commercial banks rather than consumer loans made by commercial banks
ReplyDeleteThe key difference is banks were in packaging nearly half of their loans into ABS. As the ABS market collapsed those loans were forced to pile up on the books.