The option to wait to invest and equilibrium credit rationing

R Lensink; E Sterken

doi:10.1353/mcb.2002.0030

The option to wait to invest and equilibrium credit rationing

R Lensink^*, E Sterken

^*Corresponding author voor dit werk

Faculteit Economie en Bedrijfskunde

Onderzoeksoutput › Academic › peer review

14 Citaten (Scopus)

303 Downloads (Pure)

Samenvatting

Stiglitz and Weiss (1981) show that firms considering risky projects have higher reservation interest rates and hence it is optimal for a bank to reduce loan supply. In this note we show that when the risk involved in an investment will be resolved in the future, investors with riskier projects have a greater return from waiting. More risky projects have lower reservation interest rates and hence there is no motive for banks to ration credit demand.

Originele taal-2	English
Pagina's (van-tot)	221-225
Aantal pagina's	5
Tijdschrift	Journal of money credit and banking
Volume	34
Nummer van het tijdschrift	1
DOI's	https://doi.org/10.1353/mcb.2002.0030
Status	Published - feb.-2002

Toegang tot document

10.1353/mcb.2002.0030

The Option to Wait to InvestFinal publisher's version, 287 KBLicentie: Taverne

Handle.net

Permanente koppeling

Citeer dit

@article{d90d2a95c06342ff8bf76a27a0fb8376,

title = "The option to wait to invest and equilibrium credit rationing",

abstract = "Stiglitz and Weiss (1981) show that firms considering risky projects have higher reservation interest rates and hence it is optimal for a bank to reduce loan supply. In this note we show that when the risk involved in an investment will be resolved in the future, investors with riskier projects have a greater return from waiting. More risky projects have lower reservation interest rates and hence there is no motive for banks to ration credit demand.",

keywords = "UNCERTAINTY",

author = "R Lensink and E Sterken",

year = "2002",

month = feb,

doi = "10.1353/mcb.2002.0030",

language = "English",

volume = "34",

pages = "221--225",

journal = "Journal of money credit and banking",

issn = "0022-2879",

publisher = "Wiley",

number = "1",

}

TY - JOUR

T1 - The option to wait to invest and equilibrium credit rationing

AU - Lensink, R

AU - Sterken, E

PY - 2002/2

Y1 - 2002/2

N2 - Stiglitz and Weiss (1981) show that firms considering risky projects have higher reservation interest rates and hence it is optimal for a bank to reduce loan supply. In this note we show that when the risk involved in an investment will be resolved in the future, investors with riskier projects have a greater return from waiting. More risky projects have lower reservation interest rates and hence there is no motive for banks to ration credit demand.

AB - Stiglitz and Weiss (1981) show that firms considering risky projects have higher reservation interest rates and hence it is optimal for a bank to reduce loan supply. In this note we show that when the risk involved in an investment will be resolved in the future, investors with riskier projects have a greater return from waiting. More risky projects have lower reservation interest rates and hence there is no motive for banks to ration credit demand.

KW - UNCERTAINTY

U2 - 10.1353/mcb.2002.0030

DO - 10.1353/mcb.2002.0030

M3 - Article

SN - 0022-2879

VL - 34

SP - 221

EP - 225

JO - Journal of money credit and banking

JF - Journal of money credit and banking

IS - 1

ER -

The option to wait to invest and equilibrium credit rationing

Samenvatting

Toegang tot document

Handle.net

Vingerafdruk

Citeer dit