Recent credit market problems and federal legislation lowering lender revenues have diminished the availability of some types of student loans. Nevertheless, new sources of funding have become available, changing the structure of the market while helping to meet the demand for student loans

Loan guarantees are arguably the most widely used policy intervention in credit markets, especially for consumers. This may be natural, as they have several features that, a priori, suggest that they might be particularly effective in improving allocations. However, despite this, little is...

In this paper, we develop a normative theory of unsecured consumer credit and personal bankruptcy based on the optimal trade-off between incentives and insurance. First, in order to characterize this trade-off, we solve a dynamic moral hazard problem in which agents' private effort decisions...

How might society ensure the allocation of credit to those who lack meaningful collateral? Two very different options that have each been pursued by a variety of societies through time and space are (i) relatively harsh penalties for default and, more recently, (ii) loan guarantee programs that...

We describe a stochastic economic environment in which the mix of money and trade credit used as means of payment is endogenous. The economy has an infinite horizon, spatial separation and a credit-related transaction cost, but no capital. We find that the equilibrium prices of arbitrary...

The evolution and structure of the payments system is explained by efficiency gains from substituting claims on particular institutions for commodity money. Information-intensive lending and payments services have been provided jointly by the same set of institutions, i.e., banks, because...

This article emphasizes the role of nonprice rationing in credit crunches. It proposes a process for identifying credit crunches centered on the political economy of the period under study. The process is applied to the U.S. for the 1960-92 period, and a variable is constructed that indicates...

Since early 1990, the results of the Federal Reserve Board's Senior Loan Officer Opinion Survey on Bank Lending Practices have been cited frequently as an indicator of general credit availability. Results from the Board's survey suggest that a considerable share of respondent banks were...

For the last three years, the Federal Open Market Committee has focused greater attention on certain monetary and credit aggregates in specifying its longer-run targets.

Credit controls are generally believed to result in an inefficient allocation of resources. This paper presents a counterexample. It displays a general equilibrium, multi-good model with spatial separation for which steady state equilibria exist in which both cash (i.e. fiat currency) and trade...