Financial Intermediaries and the Macroeconomy: Evidence from a High-Frequency Identification

2025/11/06 by Pablo Ottonello, Wenting Song · 1 voice
Business, Management and Accounting · Economics, Econometrics and Finance · #Auditing, Earnings Management, Governance #Credit Risk and Financial Regulations #Financial Markets and Investment Strategies

paper · doi:10.1093/ej/ueaf119

openalex publication_date 2025/11/06 · openalex created_date 2025/11/09 · openalex updated_date 2026/07/30

Abstract

Abstract We provide empirical evidence on how news about financial intermediaries’ net worth impacts the aggregate economy, using a high-frequency identification strategy. We measure ‘financial shocks’ based on the idiosyncratic stock price changes of large US intermediaries in a narrow window around their earnings announcements. We document significant effects of these shocks on the stock price and borrowing costs of non-financial firms, as well as on macroeconomic variables. The effects are more pronounced for firms with low credit ratings and when the aggregate net worth of intermediaries is low.

Citations

• When Credit Bites Back
• Estimation and Inference of Impulse Responses by Local Projections
• The Employment Effects of Credit Market Disruptions: Firm-level Evidence from the 2008–9 Financial Crisis*
• Financial Heterogeneity and the Investment Channel of Monetary Policy
• The Aftermath of Financial Crises
• A Model of Capital and Crises

Discussions

• Forthcoming in EJ: ‘Financial Intermediaries and the Macroeconomy: Evidence from a High-Frequency Identification,’ by Pablo Ottonello, Wenting Song doi.org/10.1093/ej/u... #EconSky [bsky, 0 points, 1 comments]