Working papers, Department of Economics, WU (Wirtschaftsuniversität Wien)
Uncertainty, market power and credit rationing
Abstract: This paper explores the nexus between uncertainty and
credit restrictions. A Post Keynesian approach to an explanation of access
rationing to credit is developed and contrasted with the dominant
relationship lending school. It is argued that access rationing to credit
has be understood in terms of uncertainty and power. Differences in
systemic uncertainty to which hetrogenous market participants are exposed
can explain the reluctance of banks to lend to certain applicants.
Monopsonistic power and uncertainty further help to understand why banks of
a different size show differences in their lending behavior.
JEL-Codes: E12; E51; D81; D89; (follow links to similar papers)
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