Credit Constraints in General Equilibrium: Experimental Results
affiliation not provided to SSRN
University of California, Davis - Department of Economics
The Economic Journal, Vol. 107, Issue 444, pp. 1445-1464, 1997
Our work attempts to investigate the influence of credit tightness or expansion on activity and relative prices in a multimarket set‐up. We report on some double‐auction, two‐market experiments where subjects had to satisfy an inequality involving the use of credit. The experiments display two regimes, characterised by high and low credit availability. Our main results are that changes in the availability of credit: (a) have minor and unsystematic effects on quantities and relative prices in the high‐credit regime; (b) have substantial effects, both on quantities and relative prices, in the low‐credit regime.
Number of Pages in PDF File: 20Accepted Paper Series
Date posted: February 2, 2012
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