Saving eliminates credit rationing

David de Meza and David C. Webb

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Equilibrium 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.

JEL-codes: E50 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2001-12-13
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Related works:
Working Paper: Saving Eliminates Credit Rationing (2001)
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