Intermediation and the equilibrium allocation of investment capital: Implications for economic development

摘要: Abstract We investigate several common assertions about intermediation and how it affects the allocation of investment capital. use a model with adverse selection costly state verification in which both debt contracts credit rationing are observed. Intermediaries arise due to comparative advantage information acquisition. Relative situation absent intermediation, intermediaries reduce (inefficient) interest rate differentials. The also shows large differentials can be observed when financial markets not integrated volume is affected by changes environment.