Credit rationing, interest rates and capital accumulation

The paper deals with the theoretical analysis of the impact of credit rationing on farmer’s economic equilibrium. The analysis is carried out based on the derived dynamic optimization model, which is the dynamic investment model with adjustment costs. The credit rationing is introduced by imposing an upper limit on the control variable, which is in this case represented by the investment spending. Then, the optimal control is used to solve the optimization problem in the situation of both with and without credit constraints. Finally, the situations without and with credit rationing are compared. The results show that the occurrence of credit rationing or in general financial constraints significantly determines the capital accumulation and investment decisions of farmers and as a result their supply functions.

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Credit rationing and capital accumulation with investment and consumption loans revisited

Journal of Development Economics ◽

10.1016/j.jdeveco.2004.11.007 ◽

2005 ◽

Vol 78 (2) ◽

pp. 322-347 ◽

Cited By ~ 4

Author(s):

Fu-Sheng Hung

Keyword(s):

Capital Accumulation ◽

Credit Rationing

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Learning, Capital Accumulation, and the Transformation of California Agriculture

The Journal of Economic History ◽

10.1017/s0022050700042157 ◽

1995 ◽

Vol 55 (4) ◽

pp. 773-800 ◽

Cited By ~ 11

Author(s):

Paul W. Rhode

Keyword(s):

Labor Market ◽

Interest Rates ◽

Capital Accumulation ◽

Market Conditions ◽

Labor Market Conditions ◽

Biological Learning ◽

California Agriculture

Between 1890 and 1914, California agriculture rapidly shifted from extensive to intensive crops, emerging as one of the world's major suppliers of Mediterranean products. Based on an analysis of new data on price and quantity movements, this article calls into question the traditional emphasis on changes in transportation, water, and labor market conditions as explanations for California's transformation. It argues that increases in fruit supply outpaced increases in demand and that declining farm interest rates and biological learning played crucial, if relatively neglected, roles in the intensification process.

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On equilibrium credit rationing and interest rates

Journal of Macroeconomics ◽

10.1016/0164-0704(95)80061-1 ◽

1995 ◽

Vol 17 (3) ◽

pp. 405-420 ◽

Cited By ~ 2

Author(s):

Jo Anna Gray ◽

Ying Wu

Keyword(s):

Interest Rates ◽

Credit Rationing

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Die Trägheit von Zinssätzen und Kreditrationierung in der Bundesrepublik Deutschland / The Sluggishness of Interest Rates and Credit Rationing in the Federal Republic of Germany

Jahrbücher für Nationalökonomie und Statistik ◽

10.1515/jbnst-1995-0205 ◽

1995 ◽

Vol 214 (2) ◽

Cited By ~ 1

Author(s):

Peter Winker

Keyword(s):

Interest Rates ◽

Federal Republic ◽

Error Correction ◽

Credit Rationing ◽

Price Setting ◽

Federal Republic Of Germany ◽

Monthly Data ◽

Long Run ◽

Short Run ◽

Marginal Price

SummaryCredit rationing is often considered as the outcome of asymmetric information between lenders and borrowers. The paper combines this aspect with a marginal price setting behavior of the banks. The resulting model describes adjustment processes between interbank rates, interest rates on deposits and on loans. Due to the non stationarity of the data, the model is estimated in error correction form allowing for distinguishing between short run dynamics and long run equilibrium. The derived hypothesis of a delayed adjustment of loan rates to changes in the interbank rates cannot be rejected with monthly data covering the sample 1975 to 1989.

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Sensitivity of Debt Flows to Fiscal External Shocks in Emerging Market and Capital Market Correlations

Advances in Social Sciences Research Journal ◽

10.14738/assrj.85.10229 ◽

2021 ◽

Vol 8 (5) ◽

pp. 157-171

Author(s):

Ahmet Niyazi Özker

Keyword(s):

Interest Rates ◽

Emerging Economies ◽

Capital Accumulation ◽

Structural Characteristics ◽

Emerging Market ◽

Financial Risks ◽

Financial Shocks ◽

Monetary Policies ◽

Global Priority ◽

Current Change

In this study, we attempted to reveal the reasons for possible debt changes regarding the sensitivity of capital change indices in emerging economies to global financial risks and the meaning of possible correlation effects at the global level. Overcoming to Global economic and financial instabilities in emerging economies have required to take different fiscal measure have been aimed at balancing the rising interest rates and global financial change costs, which are caused by rising global priority costs. The external effects of global financial shocks in emerging economies led to a significant increase in global borrowing in these economies. In other words, in these countries representing emerging economies at different levels of development, they have also provided a reason for the inclusion of different financial and monetary policies in the process. Sensitivity to global financial shocks in emerging economies is related to the structural characteristics of countries and structural impact scales and correlations regarding which markets are affected by the needs. In this respect, it appears that the developments regarding the sectors, especially the capital flow, are meaningful in terms of indexes created by the periodic changes in the values of the current change. In this respect, in emerging economies, these shocks mostly emerge with effects giving different correlation results in countries that differ according to global crises and have other capital accumulations. The remarkable point in terms of the correlations determined here is that debt ratios and capital accumulation variations in emerging economies have put forth a significant correlation in a period of global financial shocks.

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