We show that “zombie credit”—subsidized credit to nonviable firms—has a disinflationary effect. By keeping these firms afloat, zombie credit creates excess aggregate supply, thereby putting downward pressure on prices. Granular European data on inflation, firms, and banks confirm this mechanism. Markets affected by a rise in zombie credit experience lower firm entry and exit, capacity utilization, markups, and inflation, as well as a misallocation of capital and labor, which results in lower productivity, investment, and value added. If weakly capitalized banks were recapitalized in 2009, inflation in Europe would have been up to 0.21 percentage points higher post-2012.

中文翻译：

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僵尸信贷和（反）通货膨胀：来自欧洲的证据

我们证明“僵尸信贷”——向无法生存的企业提供补贴信贷——具有抑制通货膨胀的作用。通过维持这些企业的生存，僵尸信贷造成了总供给过剩，从而对价格造成下行压力。欧洲有关通胀、企业和银行的详细数据证实了这一机制。受僵尸信贷增加影响的市场会出现企业进入和退出、产能利用率、加价和通货膨胀下降，以及资本和劳动力配置不当，从而导致生产率、投资和附加值下降。如果资本较弱的银行在 2009 年进行资本重组，那么 2012 年之后欧洲的通胀率将高出 0.21 个百分点。