Saving Eliminates Credit Rationing
AbstractEquilibrium 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.
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Bibliographic InfoPaper provided by Financial Markets Group in its series FMG Discussion Papers with number dp391.
Date of creation: Sep 2001
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