The real effects of credit constraints: evidence from discouraged borrowers in the euro area

During the recent crisis we have witnessed a fragmentation of the _x000C_nancial markets in the euro area which has disrupted the traditional transmission channels of monetary policy and which has put severe pressure on _x000C_rms in need of external _x000C_nance in the stressed countries. This not only translated into a larger number of _x000C_rms with rejected loan applications, but also into a larger number of discouraged borrowers, especially in the stressed countries.