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Title
Imperfect credit markets: implications for monetary policy.
Abstract
The article reports on the economic condition of the credit markets in Great Britain. It argues that the markets may not operate perfectly due to the limitations on how much information the lender has about the quality of the borrower, or how well contracts between lenders and borrowers can be enforced. It notes that the presence of borrowing constraints indicate a trade-off between short-term inflation and output fluctuations due to their effect on future output.