European Business Schools Librarian's Group

Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics

Uncertainty, market power and credit rationing

Paul Ramskogler ()
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Paul Ramskogler: Department of Economics, Vienna University of Economics & B.A.

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 August 2007

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