International Lending, Long-Term Credit Relationships, and Dynamic Contract Theory

TL;DR: In this article, the authors analyzed the structure of credit market equilibrium under imperfect information and compared credit rationing and Collateralization as alternative means to cope with problems of adverse selection and moral hazard.

TL;DR: This article argued that a high level of central-band independence coupled with an explicit mandate that the bank aim for price stability are important institutional devices for maintaining that stability, and a number of countries have recently increased the independence of their central banks in order to raise their commitment to price stability.

TL;DR: The authors used structural vector autoregression (SVA) techniques to examine the symmetry of disturbances and the speed with which economies adjust as key criteria affecting the decision of whether to form a monetary union.

TL;DR: In this article, the authors examine how Vietnam's firms use ongoing relationships to maintain agreements and find that these relationships serve to reduce the transaction costs of the market: the costs of locating trading partners, of negotiating and monitoring contracts, and of enforcing agreements and settling disputes.

TL;DR: In this paper, it was shown that the optimal, incentive-compatible debt contract is the standard debt contract and that the second-best level of investment never exceeds the first-best and is strictly less when there is a positive probability of costly bankruptcy.

TL;DR: In this article, it was shown that the optimal, incentive-compatible debt contract is the standard debt contract and that the second-best level of investment never exceeds the first-best and is strictly less when there is a positive probability of costly bankruptcy.

TL;DR: Implicit contracts are nontrivial Nash equilibria to the post-hiring trading game between a worker and the employer, which are supported by intra-firm, rather than labor market, reputations as mentioned in this paper.

TL;DR: The current crisis in international lending points up a lesson re-learned several times in the past 150 years: the international loan markets function very differently from the textbook model of competitive lending as mentioned in this paper.