Equilibrium loan contracts and endogenous growth in the presence of asymmetric information

• 成果类型: Article
• 署名作者: Bose, N; Cothren, R
• 署名单位: Virginia Polytechnic Institute & State University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(96)01275-5
• 发表日期: 1996
• 页码: 363-376
• 关键词: endogenous growth; credit market; asymmetry of information; Credit rationing; screening

摘要

This paper considers an endogenous growth model in which an informational asymmetry exists between capital producing borrowers and lenders as to the borrower's ability to successfully operate an investment project. In contrast to previous models of this genre, the lender can induce self-selection either by rationing a fraction of borrowers, or by using a costly screening technology, or by a mix of the two. The equilibrium contract's form and the growth rate of output are mutually dependent and are jointly determined. The effect of the lower cost of screening on the growth rate of output has been considered. We show that a decline in the screening cost, paradoxically, may lower the growth rate of output. Only when a threshold level of sophistication is crossed will the benefit of an advanced financial sector become evident in a higher growth rate.