Optimal Dynamic Lending Contracts with Imperfect Enforceability
Rui Albuquerque () and
RCER Working Papers from University of Rochester - Center for Economic Research (RCER)
In this paper we have developed a general model of borrowing constraints based on the idea of limited enforcement. I our model, borrowing constraints arise as part of the optimal borrowing and lending contract. Our model extends previous theories of borrowing and lending , such as Hart and Moore (1994) allowing for uncertainty and dynamic effects of the resulting credit constraints.
Keywords: BANKING; ENTERPRISES; INVESTMENTS (search for similar items in EconPapers)
JEL-codes: G21 G24 (search for similar items in EconPapers)
Pages: 37 pages
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Persistent link: https://EconPapers.repec.org/RePEc:roc:rocher:439
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