We ask which part of the observed cross-country differences in the level of per capita income can be accounted for by monopoly rights in the labour market. We answer this question in a calibrated growth model with two final goods sectors. The novel feature being that monopoly rights in the capital-producing sector shield insiders from [...]
Credit Rationing in Microfinance
This paper argues that borrowers who are considered to be too risky are excluded from microfinance markets due to credit rationing. Insufficient institutional frameworks imply moral hazard which in turn causes the rationing of credit. Focusing on outreach and pricing issues, it is shown here how the outreach of microfinance depends on capital costs and [...]