Garcia, Jorge Luis; Digiannatale, Sonia; Carreon, Victor G - In: Economics Bulletin 35 (2015) 1, pp. 89-96
We analyze why formal credit, informal credit, and both types of credits coexist as consumer choices. We construct a model in which the households pay a fixed cost to access each type of market and face a market particular interest rate. The model induces a cost curve that defines an optimal,...