Information Productivity and Interest Rate of Credit--an Analysis Based on the Model of Credit Rationing

摘要

Given the condition of asymmetric information, financial institutions should practice credit rationing. However, the purpose of classical theories of credit rationing is to explain the phenomena of credit rationing not the interest rate decision mechanism. Therefore, they don't indicate how banks' information productivity affect the decision of the interest rate of its loans. This essay attempts to interpret the mechanism of information productivity in the determination of its interest rate of credit through the extension of the credit rationing model of Stieglitz and Weiss (1981). The extension of Stieglitz's model in this paper makes the model capable of interpreting not only credit rationing but also how information productivity determines the interest rate of credit.