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How the concept of 'invisible hand' regulates the intersection of credit and gossip in the choices open to fictional characters Lady Teazle and Nora Helmer are investigated. Teazle and Helmer are heroines of the plays 'The School for Scandal' by Richard Sheridan and 'A Doll House' by Henrik Ibsen. These plays are deemed as portrayals of the social consequences of gossip and credit.

Market women in northern Ghana tend to maintain complex networks of informal credit providers. These networks facilitate market women's access to credit in case of risks that could interrupt their businesses and income flow to their households. In the long run, high costs involved in credit prevent market women from emerging from poverty.

The financial crisis of 2008-2009 has antecedents in earlier crises, including the Great Depression. In order to understand how the current crisis arose, we must review the most fundamental principles of banking. Doing that, we find that the main service performed by banks is the creation of liquidity, a collective good that can be destroyed by the behavior of individual financial institutions. The key element in creating liquidity is the monetization of various types of collateral. When collateral takes the form of land or capital that turns over slowly, banks lose liquidity. That is why major banking crises have frequently been associated with real estate lending. The best way to restore health to the financial system is by restoring the principles of the 'real bills' doctrine that requires loans to be self-liquidating.

A study was conducted to examine the transmission mechanism of monetary policy in Trinidad and Tobago. Financial markets are usually unsophisticated in developing countries. Findings indicate that credit channel is dominant in Trinidad and Tobago. It is concluded that these results can help policy makers in the design and implementation of monetary policy in other developing countries.

Credit applicants are assigned to good or bad risk classes according to their record of defaulting. Each applicant is described by a high-dimensional input vector of situational characteristics and by an associated class label. A statistical model, which maps the inputs to the labels, can decide whether a new credit applicant should be accepted or rejected, by predicting the class label given the new inputs. Support vector machines (SVM) from statistical learning theory can build such models from the data, requiring extremely weak prior assumptions about the model structure. Furthermore, SVM divide a set of labelled credit applicants into subsets of 'typical' and 'critical' patterns. The correct class label of a typical pattern is usually very easy to predict, even with linear classification methods. Such patterns do not contain much information about the classification boundary. The critical patterns (the support vectors) contain the less trivial training examples. For instance, linear discriminant analysis with prior training subset selection via SVM also leads to improved generalization. Using non-linear SVM, more 'surprising' critical regions may be detected, but owing to the relative sparseness of the data, this potential seems to be limited in credit scoring practice. Journal of the Operational Research Society (2005) 56, 1082-1088. doi:10.1057/palgrave.jors.2602023 Published online 29 June 2005 Keywords: support vector machines; classification; banking; finance; forecasting; heuristics; quadratic optimization

Establishment of an equilibrium model helps, lenders search for matches, and borrowers to satisfy equilibrium in entry conditions. A liquidity shock depends upon the source. Only few borrowers will be able to be a part of credit market, due to less market liquidity and a hike in quality.

A model for valuing both credit risk and interest risk in Italy's market for mortgage loans is presented.

An integrated credit risk measurement model is presented for financial risk management. Various aspects such as asset pricing, stochastic recovery rates, seniority of debt and integration of market are discussed.

Small enterprises face a financial landscape that limits their access to bank loans and trade credit. They adapt by relying on a range of other mechanisms to relieve the financing constraint. Employing an institutional framework, the paper explores the use of credit from suppliers, customers and other sources. A unique finding is that very small firms use purchase orders as a signaling device to obtain irregular access to trade credit. The use of pre-payments, installments and overdrafts is also investigated. The results indicate that small firms may be less credit constrained than is suggested by a narrow definition of credit. Evidence is drawn from a survey of 115 micro and small manufacturing enterprises in Nairobi. Key words--Africa, Kenya, credit, small enterprise, entrepreneurs

Mises' Theory is grounded on the 'ultra-Wicksellian' idea that the pure credit system represents the working of a modern monetary economy, and that forcing banks to raise the rate of money interest does not need to operate through some binding bank-liquidity constraint. It is the rise in the relative price of consumption goods against production goods that accounts for the end of inflation. According to Mises, it is in the power of the banks to resist this readjustment; in this event, the only end to hyperinflation comes from the breaking of the monetary system. Hayek develops the second side of Mises' argument, the capital-allocation effect, while the first side, the ultra-Wicksellian picture of the monetary economy, is either weakened or taken for granted. Wicksell's 1914 reaction to Mises' book is recalled. Some criticism of Mises' readjustment mechanism from a Keynesian-Schumpeterian point of view is offered in the concluding remarks.

Byline: Gary Emery (1), Nandkumar Nayar (1) Keywords: Product quality; payment terms; trade credit; supplier credit Abstract: This paper provides a theoretical explanation for the choice of payment terms under which a company sells its products. In our model, these terms are chosen to permit sellers or buyers to specialize at repairing defects if they are equally well-informed about quality or if one has significantly lower repair costs than the other. Otherwise, the terms are chosen to signal product quality. We also develop the empirical implications of this theory by predicting a seller's choice of payment terms based on the characteristics of its product market. Author Affiliation: (1) College of Business Administration, University of Oklahoma, Norman, OK, 73019-0450 Article History: Registration Date: 06/10/2004

Uncollateralized lending to jointly liable groups of individuals has proven to be a successful way of delivering credit to the poor in less-developed countries. Currently, such financial arrangements are being tried in the United States. The author develops a financial intermediation model in order to analyze the portability of group lending to the United States and the connection between group lending and the rest of the financial intermediation sector., Imagine a small group of people, each of whom borrows money from a financial intermediary. The intermediary does not require collateral because the borrowers are relatively poor and do not [...]

An analysis of credit availability and its influence on activity and relative prices in multimarkets reveals that changes in the availability of credit have minor effects on high-credit regimes but substantial effects on low-credit regimes. The study also reveals that the two regimes (high and low credit availability) are affected differently in terms of activity and relative prices and both are affected simultaneously.

A household's attitude towards installment buying and accessibility of credit during the 1920s has significantly affected the process of an effective demand. Keynesian economics claim that the event caused the increase of liabilities among households and deterioration of consumer confidence by 1929. However, efforts to eliminate these debts have led to a shift in consumption that increased ratio of repayments of installment debts.

A three-sector static model of a small open economy has been developed with special consideration to the urban informal sector and the informal capital market. Informal capital is mobile between the rural sector and the urban informal sector. Policy effects in this model appear to be different from those analysed in other three-sector models. Keywords: Informal sector; Informal credit; Migration; Subsidy; Factor income; Lender's risk

A study was conducted on the role of central city lending goals on expanding access to the secondary mortgage markets. Census tracts are grouped according to five variables that impede secondary market purchases. A comparison of borrower characteristics and lending patterns is conducted. The results indicate that targeting affirmative lending requirements on the basis of neighborhood characteristics rather than political or statistical divisions may lead to a more suitable framework for efforts to expand access to credit.

A general method for determining credit risk exposure has been developed. In the method, exposure is expressed as a function of interest rates, exchange rates and lives of contracts. The method is better than the Bank for International Settlements method, which is rather crude since it defines exposure as the positive market-to-market value of a swap plus a fixed add-on. The method shows that the add-on decreases as the swap becomes more in or out-of-the-money.

Empirical analysis on the effects of monetary policy has viewed the monetary transmission mechanism as a 'black box.' The credit channel's role in the black box of monetary policy transmission is presented. The balance sheet channel and the bank lending channel are two linkages examined. It is proposed that allowing a certain type of credit channel is needed to understand the response of the economy to changes in monetary policy.

The general equilibrium consequences of credit rationing resulting from static incentive problems is examined, and policies supporting constrained optimality properties are described. A pure exchange overlapping generations economic model is studied, with an added adverse selection problem in financial markets. Deficit financing and related welfare issues, including the consequences of credit rationing, are considered. Results are contrasted with those obtained under exogenously imposed credit restrictions.

This paper claims that credit markets' imperfections matter significantly to open economies, and can alter basic macroeconomic results. This is demonstrated in the paper by use of an open economy model with individual credit rationing, due to asymmetric information and moral hazard. The paper concentrates on the effect of fiscal policy and shows that when credit is rationed, the standard result does not hold and a fiscal expansion may create a surplus instead of a deficit in the current account. Furthermore, the paper shows that whether credit is rationed or not depends on the tax burden.

It is argued that Patinkin's introduction in his 1956 book of the stability analysis of the price level resulted in great measure from his reading of Wicksell's 1898 Interest and Prices. Both Patinkin and Wicksell based their treatments of the stability of the price level on what Patinkin used to call the 'real balance effect.' That effect, however, does not operate under Wicksell's assumption of a competitive 'pure credit economy,' where all transactions are carried out by bookkeeping transfers, and the unit of account is the same unit in which the accounts of banks are kept. In that case, Patinkin showed in the second (1965) edition of his book that the real balance effect - and, by that, the stability of the price level - would still be a feature of the system if profit maximizer banks held reserves, created by the central bank to settle temporary imbalances at the clearinghouse. According to Wicksell, on the other hand, a pure credit economy should consist of a central bank that attracts and remunerates deposits at the same interest rate charged for its loans, plus profit maximizer financial intermediaries that lend money for risky projects. The basic rate of interest set by the central bank decides, accordingly, the price level in such an economy. Wicksell's and Patinkin's approaches differ from the view put forward in the 1980s by the so-called 'new monetary economics' that the key to price level stabilization is the separation of the function of money as the unit of account from its function as the medium of exchange in pure accounting systems of exchange.

Byline: Daria Marassi, Valetino Pediroda This paper presents a new approach to develop the probability of default for private firms. This work provides a global perspective regarding the credit risk prediction, starting from the work of the Basel Committee on Banking Supervision, with a deep study of the more predictive variables for default prediction and, finally, building a new mathematical model based on machine learning. The used method is called Maximum Expected Utility (MEU) and represents the most promising methodology for the default prediction. The main idea is to use the interaction between variables to improve the final model efficiency. The development model has been tested on complex analytical function (in which the classical models fault) and finally has been developed to assess the distress of industrial companies according to Basel II guidelines. The evidence was related to Italian industrial enterprises and took into consideration, the situation of the Italian economy both from a micro and macro perspective.