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Liquidity constraints in commercial loan markets with imperfect information and imperfect competition Author info | Abstract | Publisher info | Download info | Related research | Statistics S.L. Schreft
A.P. Villamil
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This paper presents a simple general equilibrium model of the commercial loan market in which liquidity constraints arise endogenously because of imperfect information and imperfect competition. The information and market structure generate a discriminatory interest rate schedule and loan size restrictions, which we interpret as liquidity constraint phenomena. The model's predictions are consistent with actual lending policies observed in the commercial loan industry. Further, the lender and all borrowers are at least as well off under this solution as they would be if faced with any single interest rate policy other than the competitive rate.
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Paper provided by Federal Reserve Bank of Richmond in its series Working Paper with number
90-10.
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Date of creation: 1990Date of revision:
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Keywords: Liquidity (Economics) ; Bank loans ; References listed on IDEAS 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.:
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Imrohoruglu, Ayse, 1989.
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Evans, David & Jovanovic, Boyan, 1987.
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Azariadis, C. & Smith, B.D., 1989.
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[Downloadable!] (restricted)
Scheinkman, Jose A & Weiss, Laurence, 1986.
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Williamson, Stephen D., 1986.
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Other versions: Spence, A Michael, 1980.
"Multi-Product Quantity-Dependent Prices and Profitability Constraints ,"
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