Explain how the forbearance lending contribute to the low output growth experienced after the GFC and ESC by economies/firms.

During the 2008- ‘09 Global Financial crisis (GFC) and the European Sovereign crisis (ESC) banks interrupted lines of credits to non-financial corporations. Discuss how the shortage of credit supply in the above-mentioned periods affected corporate failures and firms’ investment decisions. Explain how the forbearance lending contribute to the low output growth experienced after the GFC and ESC by economies/firms.

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