Public policy in support of small business: the American experience

Ben Craig, William E. Jackson and James B. Thompson
Authors registered in the RePEc Author Service: James B. Thomson

No 1116, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: Information problems in small enterprise credit markets can result in a market equilibrium characterized by credit rationing. These information problems are potentially more severe during sharp economic downturns such as the recent Great Recession. Government interventions to alleviate credit constraints on small firms need to be designed to correct the specific market failure resulting in socially suboptimal credit flows. We argue that Small Business Administration loan guarantees are a potentially appropriate intervention and provide a review of empirical research that supports our contention.

Keywords: small business finance; Small Business Administration; Financial markets (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ent
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