The article explores how financial problems affect the US economy after World War II. By using a special method to estimate models, the researchers show that financial shocks can have a big impact on the economy, but it takes time to see the effects. They find that changes in credit risk and loan terms can influence how monetary policy affects the economy. Risk spreads tend to go down when the economy is doing well, and changes in loan terms have a stronger effect on the economy than changes in credit risk.