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Does adverse selection justify government intervention in loan markets?

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  • Jeffrey M. Lacker

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  • Jeffrey M. Lacker, 1994. "Does adverse selection justify government intervention in loan markets?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 61-95.
    • Handle: RePEc:fip:fedreq:y:1994:i:win:p:61-95
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    References listed on IDEAS

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    1. Stephen D. Williamson, 1994. "Do informational frictions justify federal credit programs?," Proceedings, Federal Reserve Bank of Cleveland, pages 523-551.
    2. Boyd, John H & Smith, Bruce D, 1993. "The Equilibrium Allocation of Investment Capital in the Presence of Adverse Selection and Costly State Verification," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(3), pages 427-451, July.
    3. Kahn Charles M. & Mookherjee Dilip, 1995. "Coalition Proof Equilibrium in an Adverse Selection Insurance Economy," Journal of Economic Theory, Elsevier, vol. 66(1), pages 113-138, June.
    4. Rudolph G. Penner, 1989. "Credit Rationing and Government Loan Programs: A Welfare Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(2), pages 194-196, June.
    5. Lang William W. & Nakamura Leonard I., 1993. "A Model of Redlining," Journal of Urban Economics, Elsevier, vol. 33(2), pages 223-234, March.
    6. Wilson, Charles A, 1979. "Equilibrium and Adverse Selection," American Economic Review, American Economic Association, vol. 69(2), pages 313-317, May.
    7. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(4), pages 629-649.
    8. Hajime Miyazaki, 1977. "The Rat Race and Internal Labor Markets," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 394-418, Autumn.
    9. N. Gregory Mankiw, 1986. "The Allocation of Credit and Financial Collapse," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 455-470.
    10. Riley, John G, 1979. "Informational Equilibrium," Econometrica, Econometric Society, vol. 47(2), pages 331-359, March.
    11. Gale, William G, 1991. "Economic Effects of Federal Credit Programs," American Economic Review, American Economic Association, vol. 81(1), pages 133-152, March.
    12. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
    13. Bruce D. Smith & Michael J. Stutzer, 1989. "Credit Rationing and Government Loan Programs: A Welfare Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(2), pages 177-193, June.
    14. Prescott, Edward C & Townsend, Robert M, 1984. "Pareto Optima and Competitive Equilibria with Adverse Selection and Moral Hazard," Econometrica, Econometric Society, vol. 52(1), pages 21-45, January.
    15. Bruce C. Greenwald & Joseph E. Stiglitz, 1986. "Externalities in Economies with Imperfect Information and Incomplete Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 229-264.
    16. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    17. Jeffrey M. Lacker, 1991. "Why is there debt?," Economic Review, Federal Reserve Bank of Richmond, vol. 77(Jul), pages 3-19.
    18. R. Glenn Hubbard, 1990. "Asymmetric Information, Corporate Finance, and Investment," NBER Books, National Bureau of Economic Research, Inc, number glen90-1, March.
    19. Boyd, John H. & Prescott, Edward C., 1986. "Financial intermediary-coalitions," Journal of Economic Theory, Elsevier, vol. 38(2), pages 211-232, April.
    20. Greenberg, Joseph, 1989. "Deriving strong and coalition-proof nash equilibria from an abstract system," Journal of Economic Theory, Elsevier, vol. 49(1), pages 195-202, October.
    21. Hellwig, Martin, 1987. "Some recent developments in the theory of competition in markets with adverse selection ," European Economic Review, Elsevier, vol. 31(1-2), pages 319-325.
    22. Myles, Gareth D., 1993. "Journal of Economic Theory : J.-M. Grandmont, 1992, Transformations of the commodity space, behavioural heterogeneity, and the aggregation problem 57, 1-35," European Journal of Political Economy, Elsevier, vol. 9(3), pages 457-462, August.
    23. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    24. Innes, Robert, 1991. "Investment and government intervention in credit markets when there is asymmetric information," Journal of Public Economics, Elsevier, vol. 46(3), pages 347-381, December.
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    Cited by:

    1. Stephany GRIFFITH-JONES & Shari SPIEGEL & Jiajun XU & Marco CARRERAS & Natalya NAQVI, 2020. "Matching risks with instruments in development banks," Working Paper 7a25229b-7178-4739-9f22-c, Agence française de développement.
    2. Anginer, Deniz & de la Torre, Augusto & Ize, Alain, 2011. "Risk absorption by the state: when is it good public policy ?," Policy Research Working Paper Series 5893, The World Bank.
    3. Riccardo De Bonis & Matteo Piazza & Roberto Tedeschi, 2012. "The perverse effect of government credit subsidies on banking risk," Mo.Fi.R. Working Papers 68, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    4. Anginer, Deniz & de la Torre, Augusto & Ize, Alain, 2014. "Risk-bearing by the state: When is it good public policy?," Journal of Financial Stability, Elsevier, vol. 10(C), pages 76-86.
    5. Busetta, Giovanni & Zazzaro, Alberto, 2012. "Mutual loan-guarantee societies in monopolistic credit markets with adverse selection," Journal of Financial Stability, Elsevier, vol. 8(1), pages 15-24.
    6. Stephany GRIFFITH-JONES & Shari SPIEGEL & Jiajun XU & Marco CARRERAS & Natalya NAQVI, 2020. "Mettre en adéquation les risques et les instruments dans les banques de développement," Working Paper 7a25229b-7178-4739-9f22-c, Agence française de développement.
    7. Wenli Li, 1998. "Government loan, guarantee, and grant programs: an evaluation," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 25-52.
    8. Jeffrey M. Lacker & John A. Weinberg, 1995. "The coalition-proof core in adverse selection economies," Working Paper 94-09, Federal Reserve Bank of Richmond.
    9. Karel Janda, 2008. "Which Government Interventions Are Good in Alleviating Credit Market Failures?," Working Papers IES 2008/12, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2008.
    10. Deborah Lucas, 2016. "Credit Policy as Fiscal Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 1-57.
    11. Kartik B. Athreya & Xuan S. Tam & Eric Young, 2014. "Loan Guarantees for Consumer Credit Markets," Economic Quarterly, Federal Reserve Bank of Richmond, issue 4Q, pages 297-352.
    12. John A. Weinberg, 1994. "Firm size, finance, and investment," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 19-40.
    13. Mireille Jaeger, 2000. "Vente à perte dans le secteur bancaire et avantage concurrentiel des banques mutuelles et coopératives," Revue d'Économie Financière, Programme National Persée, vol. 56(1), pages 195-216.
    14. Karel Janda, 2003. "Credit guarantees in a credit market with adverse selection," Prague Economic Papers, Prague University of Economics and Business, vol. 2003(4), pages 331-349.
    15. Li, Wenli, 2002. "Entrepreneurship and government subsidies: A general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 26(11), pages 1815-1844, September.

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