Advanced Search
MyIDEAS: Login

Political Economy of Directed Credit

Contents:

Author Info

  • Mark Miller
Registered author(s):

    Abstract

    Imagine you are a bank manager and you have to decide to whom you will lend money. One prospect is an industrial company and the other is a farmer. As someone who wants the largest possible profits, you will look at each person’s credit worthiness and the interest rate and decide based primarily on these two factors. If the farmer is a riskier borrower but is willing to pay a high enough rate of interest to compensate for this risk, then you may very well decide to lend to the farmer. The same is true for the industrialist. In this stylised example, whoever values the loan more will receive it so the borrower is better off because he is willing to pay more later for money now, and the lender is better off because he is earning the highest possible profit. And the person who did not receive the loan is free to go to a competing banker and borrow money from there or to forgo the loan altogether. [Working Paper No. 0030]

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. 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.
    File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=Document11972010580.6227991.pdf&fcategory=Articles&AId=2673&fref=repec
    Our checks indicate that this address may not be valid because: 403 Forbidden. If this is indeed the case, please notify (Padma Prakash)
    Download Restriction: no

    Bibliographic Info

    Paper provided by eSocialSciences in its series Working Papers with number id:2673.

    as in new window
    Length:
    Date of creation: Jul 2010
    Date of revision:
    Handle: RePEc:ess:wpaper:id:2673

    Note: Institutional Papers
    Contact details of provider:
    Web page: http://www.esocialsciences.org

    Related research

    Keywords: bank manager; industrial company; credit worthiness; loan; competing banker;

    This paper has been announced in the following NEP Reports:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:2673. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Padma Prakash).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.