The Paycheck Protection Program (PPP) was launched at the height of the COVID-19 pandemic in the hopes that it would keep businesses from laying off workers during government shutdown measures taken to contain the spread of the disease.

Initial estimates of the direct impacts have been mixed, with some studies suggesting that the cost was hundreds of thousands of dollars per job saved.

But a paper in the American Economic Journal: Economic Policy looked beyond the labor market at a second order effect showing a clear and positive benefit. Authors Sumit Agarwal, Brent W. Ambrose, Luis A. Lopez, Xue Xiao found that the PPP reduced mortgage delinquencies for commercial real estate by roughly $36 billion in 2020 and likely played an important role in averting wider distress in financial markets.

Ambrose recently spoke with Tyler Smith about the impact of PPP loans on the commercial real estate market and ways in which the program could have been better targeted.