Using a small macroeconometric model that examines the determinants of India’s trade and inflation, this paper addresses the effects of a reform policy package similar to those implemented in 1991. Policy simulations using dynamic simulation method compare the responses to devaluation with the responses to tight credit policy. It is shown that the trade balance effects of tight credit policy ar...

We compare allocations sustained by credit with allocations sustained by bank notes (inside money) in a search model with decentralized trade and limited monitoring. We demonstrate that there exists a credit arrangement that is superior to inside money. However, in contrast with inside money, this arrangement is not robust to an expansion of trade that is not accompanied by an adequate increase...

Some modified structural and reduced-form models of credit risk implicitly assume that the market has less information than managers who declare default on their outstanding debt. As a result the announcement of default or disclosure of information that indicates a firm is in distress comes as a “surprise” to the market. In this paper, we study the extent to which private information is reveale...

The deterioration rate is a significant aspect of perishable goods. Since items will always deteriorate, there are effective methods for reducing the deterioration. Furthermore, in existing inventory control literature, often viewed as an exogenous component. Keeping this problem mind, article develops system from retailer’s perspective which: (i) controllable factor and suggests new fresh qual...

This paper tests for the e¤ects of increased trade and …nancial integration on business cycle co-movement. Using both quantitative theory and a reduced form empirical approach motivated by the theory, I measure and explain the channels from bilateral trade integration, …nancial integration, and industrial specialization to cyclical co-movement. The model is also used to measure the causal chann...

C have long faulted the wide-spread practice of trade promotions as wasteful. It has been estimated that this practice adds up to $100 billion worth of inventory to the distribution system. Yet, the practice continues. In this paper, we propose a price discrimination model of trade promotions. We show that in a distribution channel characterized by a dominant retailer, a manufacturer has incent...

This paper examines how competition among suppliers affects their willingness to provide trade credit financing. Trade credit extended by a supplier to a cash constrained retailer allows the latter to increase cash purchases from its other suppliers, leading to a free rider problem. A supplier that represents a smaller share of the retailer’s purchases internalizes a smaller part of the benefit...

Project background: one common strategy within the capital structure relative value umbrella is trading credit versus equity. Credit and equity are both claims on the assets of a company. Debt securities typically pay a fixed coupon to the holder as long as the company does not default, but offers no additional upside if the company’s performance improves and its assets become more valuable. On...