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Saving eliminates credit rationing [PDF]
, 2001 Equilibrium credit rationing, in the sense of Stiglitz and Weiss (1981), implies the borrower faces an infinite marginal cost of funds. Infinitessimily delaying the project to accumulate more wealth is therefore advantageous to the borrower. As a result, the well-known conditions for credit rationing cannot be satisfied.
David C Webb, David De Meza
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Trade Credit and Credit Rationing
Review of Financial Studies, 1997Asymmetric information between banks and firms can preclude financing of valuable projects. Trade credit alleviates this problem by incorporating in the lending relation the private information held by suppliers about their customers. Incentive compatibility conditions prevent collusion between two of the agents (e.g., the buyer and the seller) against
Biais, Bruno, Gollier, Christian
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Are Small Innovators Credit Rationed?
Small Business Economics, 2006Drawing upon a sample of 256 small firms who applied for bank loans, the current paper is concerned with the extent to which 'innovativeness' is associated with a lower level of loan application success. The paper records the proportion of loan successfully applied for and estimates a series of tobit models utilising a number of proxy measures for ...
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This major Handbook consists of 29 contributions that explore the full range of exciting and interesting work on money and finance currently taking place within heterodox economics. There are many themes and facets of alternative monetary and financial economics but two major ones can be identified.
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Credit Rationing in an Open Economy
International Economic Review, 1991This paper claims that credit market imperfections matter significantly to open economies and can alter basic macroeconomic results. This is demonstrated in the paper by use of an open-economy model with individual credit rationing, due to asymmetric information and moral hazard. The paper concentrates on the effect of fiscal policy and shows that when
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Components Of Credit Rationing
SSRN Electronic Journal, 2019Credit rationing by lending institutions has been the subject of much research in recent decades. Although there are some empirical indications, there is little theoretical justification about how various forms of credit rationing manifest themselves in credit markets.
Mehdi Beyhaghi +2 more
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The Near Impossibility of Credit Rationing [PDF]
, 2003 Equilibrium credit rationing in the sense of Stiglitz and Weiss (1981) implies the marginal cost of funds to the borrower is infinite. So borrowers have an overwhelming incentive to cut their loan by a dollar and thereby avoiding being rationed. Ways of doing this include scaling down the project, cutting consumption or infinitesimally delaying the ...
David de Meza, David C. Webb
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Bank Credit Commitments, Credit Rationing, and Monetary Policy
Journal of Money, Credit and Banking, 1994When loan needs are uncertain and bankruptcy is costly, contracts resembling bank credit commitments dominate ordinary debt contracts. The fees charged on commitments reduce bankruptcy risk by smoothing out borrowers' loan payments. Reduced bankruptcy risk entitles borrowers to larger loans, thereby reducing the risk of quantity rationing.
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1986
Economists have typically conducted their analyses of credit rationing in a manner which abstracts from the operations of the banking firm. This failure severely limits the understanding of the bank in its various roles. The present chapter outlines a theory of credit rationing which explicitly considers the informational aspects of the banking firm’s ...
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Economists have typically conducted their analyses of credit rationing in a manner which abstracts from the operations of the banking firm. This failure severely limits the understanding of the bank in its various roles. The present chapter outlines a theory of credit rationing which explicitly considers the informational aspects of the banking firm’s ...
openaire +1 more source