International credit and welfare: A paradoxical theorem and its policy implications

dc.contributor.author	Basu, Kaushik
dc.contributor.author	Morita, Hodaka
dc.date.accessioned	2006-08-30T03:46:38Z
dc.date.available	2006-08-30T03:46:38Z
dc.date.issued	2006-08-30T03:46:38Z
dc.description.abstract	This paper considers a developing nation that faces a foreign exchange shortage and hence its demand for foreign goods is limited both by its income and its foreign exchange balance. Availability of international credit relaxes the second constraint. We develop a simple model of strategic interaction between lending institutions and firms, and show that the availability of international credit at concessionary rates can leave the borrowing nation worse off than if it had to borrow money at higher market rates. This 'paradox of benevolence' is then used to motivate a discussion of policies pertaining to international lending and the Southern government's method of rationing out foreign exchange to the importers.	en_US
dc.format.extent	248397 bytes
dc.format.mimetype	application/pdf
dc.identifier.uri	https://hdl.handle.net/1813/3486
dc.language.iso	en_US
dc.title	International credit and welfare: A paradoxical theorem and its policy implications	en_US

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