Two dysfunctions can affect the credit market: credit rationing and firm's discouragement. While the former has been studied in detail for more than 40 years, the latter has only been in the spotlight since 2003. In this work, we contribute to the understanding of this “demand-side failure”...

We consider the problem of stabilising the income of a country, henceforth the borrower, which would always prefer a stable income to a random income with the same average, i.e. a country which is risk-averse. This would be appropriate for countries which are heavily reliant upon agricultural...