Microeconomic Production Decisions under Indebtedness

Authors

  • Osvaldo Larrañaga Departamento de Economía, Universidad de Concepción, Concepción, Chile image/svg+xml

Keywords:

firm behaviour, bank credit, indebtedness, adjustment costs, supply schedule

Abstract

The paper develops a model to study the effects on firms of bank lending subject to a finite horizon payment period. This last is an ad hoc but realistic assumption. Two cases are considered: the firm operating with a traditional neoclassical technology and the firm subject to cost of adjustment on capital input. In the first case the firm will be on its supply schedule subject to the net asset position being positive for the given horizon. In the second case the firm may operate outside its supply schedule given the credit restriction.

Downloads

Download data is not yet available.

References

Arellano, J. P. (1983). Liberalización e intervención en el mercado de capitales. Colección Estudios CIEPLAN, (11).

Arellano, J. P. (1984). La difícil salida al problema del endeudamiento externo. Colección Estudios CIEPLAN, (13).

Ayres, F. (1971). Matemáticas financieras. McGraw-Hill.

Chiang, A. (1984). Fundamental methods of mathematical economics (3.ª ed.). McGraw-Hill.

Gale, D. (1983). Money: In disequilibrium. Cambridge University Press.

Hirshleifer, J. (1970). Investment, interest and capital. Prentice-Hall.

Intriligator, M. D. (1971). Mathematical optimization and economic theory. Prentice-Hall.

Jaffee, D., & Russell, T. (1976). Imperfect information, uncertainty, and credit rationing. Quarterly Journal of Economics, 90(4), 651–666. https://doi.org/10.2307/1885327

Lucas, R., Jr. (1967). Adjustment costs and the theory of supply. Journal of Political Economy, 75(4), 321–334. https://doi.org/10.1086/259289

Meller, P. (1984). Elementos útiles e inútiles en la literatura económica sobre recesiones y depresiones. Colección Estudios CIEPLAN, (12).

Modigliani, F., & Miller, M. (1958). The cost of capital, corporation finance and the theory of investment. American Economic Review, 48(3), 261–297.

Niehans, J. (1978). The theory of money. Johns Hopkins University Press.

Santomero, A. (1984). Modeling the banking firm: A survey. Journal of Money, Credit and Banking, 16(4), 576–602.

Sargent, T. (1979). Macroeconomic theory. Academic Press.

Stiglitz, J., & Weiss, A. (1981). Credit rationing in markets with imperfect information. American Economic Review, 71(3), 393–410.

Weston, J. F., & Brigham, E. F. (1985). Manual de administración financiera. Interamericana.

Zahler, R. (1985). Las tasas de interés en Chile: 1975-1982 [Mimeo]. CEPAL.

Downloads

Published

1988-04-30

How to Cite

Larrañaga, O. (1988). Microeconomic Production Decisions under Indebtedness. Economic Analysis Review, 3(1), 111–122. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/282

Issue

Vol. 3 No. 1 (1988)

Section

Articles

License

Copyright (c) 1988 Osvaldo Larrañaga

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Article usage

ViewsTimes this article's page was opened since the journal started recording statistics. One person can visit more than once.
111
DownloadsTimes the full text of this article (usually the PDF) was opened or downloaded.
16

All time, as recorded by the journal.

Last 2 years: 62 views, 16 downloads.

0.14 downloads per view (journal average 1.65).Downloads of the full text for every abstract view of this article, compared with the whole journal.

Explore the journal's metrics