September 5, 2023, 11:30–12:30
BDF, Paris
Room 3 Espace Conférence and Online
Séminaire Banque de France
Abstract
We document some stylized facts on big tech credit and rationalize them through the lens of a model where big techs facilitate matching on the e-commerce platform and extend loans. The big tech reinforces credit repayment with the threat of exclusion from the platform, while bank credit is secured against collateral. Our model suggests that: (i) a rise in big techs’ matching efficiency increases the value for firms of trading on the platform and the availability of big tech credit; (ii) big tech credit mitigates the initial response of output to a monetary shock, while increasing its persistence; (iii) the efficiency gains generated by big techs are limited by the distortionary fees collected from users.
Keywords
Big Techs, Monetary policy, Credit frictions;
JEL codes
- E44: Financial Markets and the Macroeconomy
- E52: Monetary Policy
- E51: Money Supply • Credit • Money Multipliers
- G21: Banks • Depository Institutions • Micro Finance Institutions • Mortgages
- G23: Non-bank Financial Institutions • Financial Instruments • Institutional Investors