profitable and diverse rural clients with the ability to service loans, well-run financial institutions which are financially … distributed government directed soft credit at unsustainable interest rates to financially troubled farms in order to cover losses … input markets from direct state involvement to substantial credit subsidies. In these policy changes the government of …

We examine how the cost of corporate credit varies around fiscal consolidations aimed at reducing government debt … price the short-term recessionary effects in loans but large consolidations can reduce or undo the increase in spreads …