This paper discusses the economic order quantity ( EOQ ) under partial trade credit. In 1985, Goyal assumed that: (i) The unit selling price and the unit purchasing price were equal. (ii) The supplier would offer the retailer full trade credit under condition of delay payments. The main purpose of this paper wants to modify Goyal’s model to presume that the unit selling price and the unit purch...

Trade credit refers to providing goods and services on a deferred payment basis. Commercial credit management is a matter of great importance for most small and medium enterprises (SMEs), since it represents a significant portion of their assets. Commercial lending involves assuming some credit risk due to exposure to default. Thus, the management of trade credit and payment delays is strongly ...

This paper considers a credit mechanism for selecting a unique competitive equilibrium (CE). It is shown that in general there exists a “price-normalizing” bundle, with which the enlargement of the general-equilibrium structure to allow for default subject to appropriate penalties results in a construction of a simple credit mechanism for a credit using society to select a unique CE. With some ...

This paper presents a small macroeconometric model examining the determinants of Indian trade and inflation to address the effects of a reform policy package similar to those implemented in 1991. This is different from previous studies along one important dimension that we explicitly incorporate the non-stationarity of the data into our model and estimation procedures, which suggest that the st...

We consider a multi-sector Ricardo-Viner model of an economy in which factor mobility is inhibited by a credit market imperfection and use it to address a number of standard questions in trade theory. Opening the economy to trade will tend to increase inequality in a poor country (understood as one with badly developed credit market institutions). Trade volume between poor and rich countries ma...