March 18, 2009
Are loans up?
A dropoff in lending has been a key aspect of the recession. Some government actions have been directed at increasing lending activity in the economy. Has it worked?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"Well, the good news is that some economic information suggests, yes, it is actually working. If you look at debt issued by U.S. corporations - that simply means U.S. businesses going out and borrowing money so they have to get loans - that debt, those loans, have increased significantly in recent months, and indeed, they are now back to 2007 levels. This means those corporations are, indeed, raising money successfully, and there are investors out there who are willing to loan money to those corporations. And I think you could more broadly say this suggests some slight increase in confidence in U.S. businesses. Now you combine that with the fact that we've had a two-month increase in the index of leading economic indicators, and it does give us some reasons for hope about the economy, not necessarily immediately, but down the road perhaps six to nine months."
Posted by Dave at March 18, 2009 08:44 AM