On financial frictions and firm's market power

被引：0
|
作者：
Casares, Miguel [1 ,2 ]
Deidda, Luca G. [3 ,4 ,5 ]
Galdon-Sanchez, Jose E. [1 ]
机构：
[1] Univ Publ Navarra, Pamplona, Spain
[2] Barnard Coll, New York, NY USA
[3] Univ Sassari, CRENoS, Sassari, Italy
[4] Univ Sassari, DISEA, Sassari, Italy
[5] Dipartimento Sci Econom & Aziendali, Via Muroni 25, I-07100 Sassari, Italy
来源：
ECONOMIC INQUIRY | 2023年 / 61卷 / 04期
关键词：
credit rationing; loan defaults; market power; INTERTEMPORAL SUBSTITUTION; COMPETITION; EQUILIBRIUM; CONSTRAINTS; ELASTICITY;
D O I：
10.1111/ecin.13146
中图分类号：
F [经济];
学科分类号：
02 ;
摘要：
There are two opposing welfare effects of market power in a model with monopolistic competition, loan defaults and moral hazard. The loss of output produced if firms set a higher mark-up over marginal costs confronts with some gain due to higher expected profits and the reduction of defaults. Such tradeoff results in an optimal level of market power that decreases with the efficiency of liquidation following default on a loan. If moral hazard is pervasive, credit rationing cuts down the default rates and mitigates the welfare cost of financial frictions.
引用
收藏
页码：982 / 1005
页数：24
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