PhD Dissertation: Credit Supply and The Real Economy

​An entrepreneur with a great new idea for starting a new business, or a young couple looking to buy a house will likely find themselves in a position where they will need to ask others for money to carry out their ambitions. In this situation, they turn to the financial markets to assist them in making these dreams come true, and in effect they are intrinsically dependent on the availability of credit. The recent financial crisis, with the recession that ensued, has accentuated the need for understanding how the financial markets and in particular the availability of loanable funds impacts the economy at large, including the entrepreneur and the couple buying a house. This dissertation
is comprised of four self-contained chapters concerned with how leverage, banks and credit supply impacts and interacts with the real economy.