The Fiscal and Economic Effects of Federal Credit Assistance Programs

International Monetary Fund

No 1990/098, IMF Working Papers from International Monetary Fund

Abstract: While federal credit programs are varied in form, their fiscal and economic effects arise primarily from the same source—each program’s subsidy component. Recent credit reform proposals would make control of credit subsidies the primary focus of budgetary efforts. By subjecting these subsidies to annual appropriations, the Government would gain more effective means to control the long-run fiscal effects of credit programs. Such reforms also would represent an important first step in improving their economic effects by eliminating unintended subsidies. However, many high subsidy-rate programs appear to have a significant effect on the allocation of credit without yielding clearcut efficiency gains.

Keywords: WP; loan guarantee; guarantee commitment; loan program; credit assistance program; private sector; guaranteed loan; cost of capital; direct loan program; disaster loan fund; student loan; Export-Import Bank; assistance program; CCC commodity loan; unguaranteed loan; Loans; Credit; Loan guarantees; Mortgages; Insurance (search for similar items in EconPapers)
Pages: 28
Date: 1990-01-01
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