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Public policy in support of small business: the American experience

Author

Listed:
  • Ben R. Craig
  • William E. Jackson
  • James B. Thompson

Abstract

Information problems in small enterprise credit markets can result in a market equilibrium characterized by credit rationing. These information problems are potentially more severe during sharp economic downturns such as the recent Great Recession. Government interventions to alleviate credit constraints on small firms need to be designed to correct the specific market failure resulting in socially suboptimal credit flows. We argue that Small Business Administration loan guarantees are a potentially appropriate intervention and provide a review of empirical research that supports our contention.

Suggested Citation

  • Ben R. Craig & William E. Jackson & James B. Thompson, 2011. "Public policy in support of small business: the American experience," Working Papers (Old Series) 1116, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:1116
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Should small businesses be encouraged?
      by Economic Logician in Economic Logic on 2011-09-29 19:17:00

    More about this item

    Keywords

    small business finance; Small Business Administration; Financial markets;
    All these keywords.

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