Financial Markets and Inflation Under Imperfect Information /
This paper studies the effect of inflation on the operation of financial markets, and shows how the ability of financial intermediaries to distinguish among heterogenous firms is reduced as inflation rises. This point is illustrated by presenting a simple model where inflation affects firms' pr...
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| Formato: | Revista |
| Lenguaje: | English |
| Publicado: |
Washington, D.C. :
International Monetary Fund,
1994.
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| Colección: | IMF Working Papers; Working Paper ;
No. 1994/063 |
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| Acceso en línea: | Full text available on IMF |
| Sumario: | This paper studies the effect of inflation on the operation of financial markets, and shows how the ability of financial intermediaries to distinguish among heterogenous firms is reduced as inflation rises. This point is illustrated by presenting a simple model where inflation affects firms' productivity. In particular, productivity differentials narrow as inflation increases. This effect creates incentives for risky and less productive firms to behave as high productivity firms. At high rates of inflation this may result in financial intermediaries being unable to differentiate among customers. |
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| Notas: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Descripción Física: | 1 online resource (34 pages) |
| Formato: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Acceso: | Electronic access restricted to authorized BRAC University faculty, staff and students |