Our research suggests that the answer to all of these questions is “yes”.
When funding conditions became much more difficult in the recent financial crisis, how did UK banks react?
Did they adjust their domestic and external lending to different degrees?
Did foreign-owned banks behave differently from UK-owned banks, and did it make a difference whether they were a branch or a subsidiary?
Did the other features of their balance sheet make a material difference to their lending behaviour?
So it was not surprising that the Government introduced a car scrappage scheme between April 2009 and March 2010 to stimulate private new car demand following the recession.
This article examines a fairly recent development in the industry, namely that new car purchases nowadays are mostly financed by manufacturers’ own finance houses.
This has a risk of exacerbating the cyclicality of new car sales shown in the chart.
Moreover, manufacturers increasingly bear the risk of future falls in car prices, potentially making the industry even more vulnerable to macroeconomic shocks.
Continue reading Policy makers have access to more and more detailed datasets.
These can be joined together to give an unprecedentedly rich description of the economy.
But the data are often noisy and individual entries are not uniquely identifiable.