a r t i c l e i n f o JEL classification: D42 F21 F22 O17 Keywords: Informal credit Formal credit Moneylender Foreign capital Emigration General equilibrium This paper makes an attempt to provide a theory of determination of interest rate in the informal credit market in a less developed economy in terms of a three-sector static deterministic general equilibrium model. There are two informal se...

In most inventory models it is assumed that the parameters of the model do not vary with time, and that the payment of orders from the retailer to the supplier is made immediately up on the receipt of these orders. Some suppliers, however, allow a certain fixed period to settle payment accounts. During this fixed period no interest is charged by the supplier, but beyond that period an interest,...

The current credit crunch and volatility in the financial markets is primarily blamed on two circumstances: some consumers’ misuse of mortgage credit and some mortgage lenders’ making credit available to borrowers who could hardly satisfy their credit obligations. This is an ideal time to reexamine the long-run experience concerning consumer’s use of both mortgage credit and non mortgage consum...

Trade credit is a crucial source of capital particularly for small businesses with limited financing opportunities. Inventory models considering trade have been widely studied. However, while there extensive research on the single-vendor single-buyer inventory model allowing delays in payments, systems where vendor supplies to more than one buyer received less attention. In this paper, we analy...

a r t i c l e i n f o This study empirically identifies the factors which explain the bank credit to the businesses in varying financial environments and emerging global challenges. With the major focus on supply side this study uses the ARDL econometric approach using annual data from the period 1971 to 2010 for Pakistan. The empirical results indicate that the foreign liabilities, domestic de...

a r t i c l e i n f o Keywords: Supplier–retailer inventory system Trade credit Defective items Variable production This paper investigates an integrated inventory model with variable production rate and price-sensitive demand rate under two-level trade credit. The model considers two-level trade credit policy in which the retailer receives a full trade credit from its supplier, and offers part...

Standard banking theory suggests that there exists an optimal level of credit risk that yields maximum bank profit. We identify the optimal level of risk-weighted assets that maximizes banks’ returns in the full sample of US banks over the period 1996–2011. We find that this optimal level is cyclical for the average bank, being higher than the realized credit risk in relatively stable periods w...