Costly information, entry, and credit access
نویسندگان
چکیده
منابع مشابه
Costly information, entry, and credit access
Using a theoretical model that incorporates asymmetric information and differing comparative advantages among lenders, this paper analyzes the impact of lender entry on credit access and aggregate net output. The model shows that lender entry has the potential to create a segmented market that increases credit access for those firms targeted by the new lenders but potentially reduces credit acc...
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Recent studies of credit access among low-income households find that payday loans can exacerbate, rather than alleviate, financial distress. I find that households with payday loan access are also more likely to use food assistance benefits and less likely to make child support payments required of non-resident parents. These findings suggest that borrowers in distress turn to transfer program...
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This paper has two related goals: (i) construct a model where money and credit coexist; (ii) pursue in this setting a theory of endogenous sticky prices that can be taken to the data. Search frictions generate price dispersion, and lead to monetary equilibria where profit-maximizing sellers set nominal prices they sometimes keep fixed when aggregate conditions change. Buyers can use cash or cre...
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Abstract This paper explores the implications of technological progress in consumer lending. The model features households whose endowment risk is private information, and intermediaries which observe a noisy signal of each borrower’s default risks. To offer a lending contract, an intermediary incurs a fixed cost. Each lending contract is comprised of an interest rate, a borrowing limit and a s...
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Financial innovations are a common explanation of the rise in consumer credit and bankruptcies. To evaluate this story, we develop a simple model that incorporates two key frictions: asymmetric information about borrowers’ risk of default and a fixed cost to create each contract offered by lenders. Innovations which reduce the fixed cost or ameliorate asymmetric information have large extensive...
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ژورنال
عنوان ژورنال: Journal of Economic Theory
سال: 2014
ISSN: 0022-0531
DOI: 10.1016/j.jet.2014.06.003