The Economic Theory of Usury Laws

The Economic Theory of Usury Laws

December 1999 Abstract This paper shows that if moral hazard leads to credit rationing, an approp...概要を表示 December 1999 Abstract This paper shows that if moral hazard leads to credit rationing, an appropriate usury law must raise social welfare. Under market clearing, a usury law is always beneficial if funds are inelastically supplied. When entrepreneurial heterogeneity is considered, an improvement arises even when the supply of funds is elastic. Finally a usury law may prove useful also when some e

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