In this paper, the authors show how an interlinkage between the credit and output markets is an endogenous outcome of credit market imperfections. Also, such interlinkages are Pareto optimal. This is worked out under the assumption of infinite availability of funds with the money lender. If, however, the lender faces a loanable funds constraint, it is not optimal for him to interlink, and he charges monopoly rates of interest. The paper, therefore, endogenously develops various forms of trading and lending activities. Copyright 1987 by Royal Economic Society.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Contact details of provider: Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK Fax: 01865 267 985 Email: Web page: http://oep.oupjournals.org/
For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)