Credit Rationing And The Unbalanced Credit Allocation Under The Credit Market Segmentation

The classic economic theory agrees with that the market will reach the equilibrium only if the demand equals to the supply. If the market is in disequilibrium, the price will adjust until the market reaches equilibrium. However, the credit rationing in the credit market, as well as unemployment in labor market, is quite normal, and great of literature assume that there is credit rationing equilibrium in the credit market. The allocation of credit will satisfy pareto-optimality under the classic credit market theory, in which over-borrowing and under-borrowing do not exist. Firstly, most of literature on credit rationing considers that the borrowers will suffer credit constraint under credit rationing, and the credit market will be under-borrowing; however, some of literature assumes that over-borrowing may also exist because of positive selection and moral hazard; a little of literature assumes that over-borrowing and under-borrowing may exist in the same credit market at the same time. The direct capital market is under developed in china, so the allocation of credit is very important. Currently, there are many problems concerning about the credit allocation, such as over concentration of credit, credit constraint and over growth of credit. It is necessary to analyze the credit allocation by credit theory. But because of the special national condition during the transition, the credit rationing theory from western cannot be used directly in chinaThe paper is based on the credit rationing theory under asymmetric information, and unifies the realistic situation of our country to construct the credit rationing model under the market differentiation. The characteristic of credit market as well as the efficiency of credit allocation will be analyzed. This article may be divided into three parts: The first part, which is Chapter 2, presents a broad overview of the theory of credit rationing. The paper definites credit rationing in the first place and then explores the origin of the theory as well as its development and indicates a fore-and-aft overview of this theory. Chapter 3, the second part, concentrates on the credit rationing under market differentiation. In this part, the paper will give some basic analyses about credit rationing when there are many observationally distinguishable borrowers. And then the paper will analyzes the credit market differentiation of china. The third part, including Chapter 4 and Chapter 5, at firstly constructs a basic credit rationing model, and then expands the model through two kinds of classification, which also carries on the equilibrium analysis and the static comparison analysis. Finally the paper analyzes the unbalanced allocation of credit resources of china.