American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Did the Paycheck Protection Program Help Small Businesses? Evidence from Commercial Mortgage-Backed Securities
American Economic Journal: Economic Policy
vol. 16,
no. 3, August 2024
(pp. 95–132)
(Complimentary)
Abstract
In this study, we examine the broader economic effects of the US federal government's Paycheck Protection Program by focusing on the performance of securitized commercial mortgages. We provide novel evidence for spillover effects of government interventions in the face of economic crises. We find that the PPP reduced mortgage delinquencies by approximately $36 billion in 2020. The strongest effects occur when PPP funds targeted businesses in areas most affected by COVID-19, where banks overperformed in providing PPP loans, and among mortgages on properties in retail and lodging. Thus, PPP relief to small businesses eased economic distress beyond the labor market.Citation
Agarwal, Sumit, Brent W. Ambrose, Luis A. Lopez, and Xue Xiao. 2024. "Did the Paycheck Protection Program Help Small Businesses? Evidence from Commercial Mortgage-Backed Securities." American Economic Journal: Economic Policy, 16 (3): 95–132. DOI: 10.1257/pol.20220181Additional Materials
JEL Classification
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G28 Financial Institutions and Services: Government Policy and Regulation
- I12 Health Behavior
- I18 Health: Government Policy; Regulation; Public Health
- L25 Firm Performance: Size, Diversification, and Scope
- R33 Nonagricultural and Nonresidential Real Estate Markets
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