Ghatak, Maitreesh
[VerfasserIn]
;
Morelli, Massimo
[Sonstige Person, Familie und Körperschaft];
Sjostrom, Tomas
[Sonstige Person, Familie und Körperschaft]
Credit Rationing, Wealth Inequality, and Allocation of Talent
Erschienen in:LSE STICERD Research Paper ; No. TE441
Umfang:
1 Online-Ressource (32 p)
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Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 2002 erstellt
Beschreibung:
We study an economy where agents are heterogeneous in terms of observable wealth and unobservable talent. Adverse selection forces creditors to ask for collateral. We study the two-way interaction between rationing in the credit market and the wages offered in the labour market. Both pooling and separating credit contracts can be offered in equilibrium. The minimum wealth needed to obtain a separating contract is decreasing in the wage, whereas the minimum wealth needed for a pooling contract is increasing in the wage. If the first effect dominates, the derived labour demand can be upward sloping, resulting in the possibility of multiple equilibria