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A mechanism for thawing the credit markets

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Abstract

This paper describes a mechanism designed to induce commercial banks to increase their willingness to extend loans in an economic environment characterized by increased uncertainty and diminished expectations. This mechanism is a new tool for the conduct of monetary policy to combat recessions.

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Reference

  • Fama EF, Miller MH (1972) The theory of finance. Dryden Press, Hinsdale

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Authors and Affiliations

  1. Johns Hopkins University, Baltimore, MD, USA

    Edi Karni

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  1. Edi Karni
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Correspondence to Edi Karni.

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I benefited from discussions with and comments of Barbara Karni, Jacques Drèze, Tiemen Woutersen, Stephen Shore, Donald Parsons, Yaakov Shtracher, an anonymous referee and the Thursday lunch klastch group, Hulya Eraslan, Effe Ok and Joseph Harrington.

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Karni, E. A mechanism for thawing the credit markets. Rev Econ Design 14, 243–249 (2010). https://doi.org/10.1007/s10058-009-0101-z

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  • DOI: https://doi.org/10.1007/s10058-009-0101-z

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