Opinion Survey offers information useful in forecasting commercial loan growth and overall economic activity. • Statistical analysis reveals a strong correlation between loan officers ’ reports of tighter credit standards and slowdowns in commercial lending and output. • Reported changes in credit standards can also help predict narrower measures of business activity, including inventory investment and industrial production. • The chain of events following a tightening of standards resembles a “credit crunch”: Commercial loans plummet, output falls, and the federal funds rate is lowered
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