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A mechanism for thawing the credit markets

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  • Edi Karni

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Abstract

This paper describes a mechanism designed to induce commercial banks to increase their willingness to extend loans in an economic environment characterized by increased uncertainty and diminished expectations. This mechanism is a new tool for the conduct of monetary policy to combat recessions.
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Suggested Citation

  • Edi Karni, 2010. "A mechanism for thawing the credit markets," Review of Economic Design, Springer;Society for Economic Design, vol. 14(3), pages 243-249, September.
  • Handle: RePEc:spr:reecde:v:14:y:2010:i:3:p:243-249 DOI: 10.1007/s10058-009-0101-z
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    More about this item

    Keywords

    Mechanism design; Credit markets; Incentive scheme; G01; G10; D82; D86;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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