Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper uses state-level data to test the Rajan hypothesis, from his book Fault Lines, that an increase in inequality can lead to a credit boom. Using dynamic heterogeneous panel estimation methods (i.e. MG, PMG, DFE), we find a significant positive long-run relationship between inequality and real estate lending across U.S. states.