## Credit Rating Agencies and Speedy Payday Loans

Credit ratings mean bond issuers’ trustworthiness. Therefore, the ratings affect interest rates on corporate bonds. Since the ratings show trustworthiness, better ratings mean better financial...

## INTERNATIONAL RESOURCE ALLOCATION: Trade with Incomplete Information 4

Proposition 3 implies that only a non-integrated equilibrium is possible for L/L* > L/L*. We can show that this equilibrium exists and is unique given L, L*, i.e., that for eveiy L,L* such that...

## INTERNATIONAL RESOURCE ALLOCATION: Trade with Incomplete Information 3

Our model admits of two types of equilibria, integrated and non-integrated, where we define an integrated equilibrium (IE) as an equilibrium in which w = w* and a non-integrated equilibrium (NIE) as...

## INTERNATIONAL RESOURCE ALLOCATION: Trade with Incomplete Information 2

The probability of a successful match equals 1 for z, = 0, and, if i|r is smaller than 1, declines as \zt\ rises, becoming constant at 1/2 for all |z,|’s higher than (l-i|;)/2: only when an...

## INTERNATIONAL RESOURCE ALLOCATION: Trade with Incomplete Information

This last qualification is necessary because equilibrium returns are defined with respect to distance from the median: if the distribution of types has a gap in the immediate neighborhood of the...

## INTERNATIONAL RESOURCE ALLOCATION: Trade with Incomplete Information 5

In Proposition 3 and its proof we saw that the operation of the price mechanism brings about full efficiency or maximum world income when L/L* ^ L/L*. When a NIE obtains, we can make the weaker...

## INTERNATIONAL RESOURCE ALLOCATION: The Basic Model 3

As discussed at greater length in a companion paper (Casella and Rauch 1997), our model can be read as an assignment problem: different producers must meet and they are not equally well-suited to one...

## INTERNATIONAL RESOURCE ALLOCATION: The Basic Model 2

Two features of this matching technology should be noted at the outset. First, in order to achieve maximum output it is necessary that all matches that are concluded be formed between producers on...

## INTERNATIONAL RESOURCE ALLOCATION: The Basic Model

In the next section of this paper we present our basic model. The equilibrium with complete information in all markets is derived in section III, and in section IV we analyze the solution when...

## INTERNATIONAL RESOURCE ALLOCATION: Introduction 2

We will show that in our model the informational barrier acts like a tax on trade that is zero up to a certain trade volume, then increasing with volume. Full efficiency is therefore achieved...

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