The Comparative Statics of the Effects of Credit Guarantees and Subsidies in the Competitive Lending Market
We compare the effects of government credit subsidies and guarantees on decreasing inefficiencies caused by principal-agent problems in the credit market in transition and posttransition economies. We show that the guarantees and subsidies targeted to low risk borrowers decrease efficiency while those targeted to high risk borrowers increase efficiency both in transition and post-transition economies. The uniform non-targeted guarantees decrease the credit rationing or dead-weight loss caused by the collateral transfer. The uniform subsidies may be used to improve welfare in the economy subjected to credit rationing, but they do not have any effect on the size of collateral required in post-transition economy.
|Date of creation:||2005|
|Date of revision:||2005|
|Contact details of provider:|| Postal: Opletalova 26, CZ-110 00 Prague|
Phone: +420 2 222112330
Fax: +420 2 22112304
Web page: http://ies.fsv.cuni.cz/
More information through EDIRC
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.:
- Wadim Strielkowski & Cathal O'Donoghue, 2005. "Ready to Go? EU Enlargement and Migration Potential: Lessons from the Czech Republic in the Context of the Irish Migration Experience," Working Papers IES 74, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised 2005.
- Michal Bauer, 2005. "Theory of the Firm under Uncertainty: Financing, Attitude to Risk and Output Behavior," Working Papers IES 71, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised 2005.
- Karel Janda, 2004. "Bankruptcy Procedures with Ex Post Moral Hazard," Working Papers IES 61, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised 2004.
- Peter Tuchyòa & Martin Gregor, 2005. "Centralization Trade-off with Non-Uniform Taxes," Working Papers IES 81, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised 2005.
- 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.
- František Turnovec & Jacek W. Mercik & Mariusz Mazurkiewicz, 2004. "Power Indices: Shapley-Shubik OR Penrose-Banzhaf?," Working Papers IES 48, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised 2004.
- repec:prg:jnlpep:v:2003:y:2003:i:4:id:225 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:fau:wpaper:wp082. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Herrmannova)
If references are entirely missing, you can add them using this form.