Bank Loan Availability and Trade Credit Demand

This paper investigates the effects of bank loan availability on the trade credit and credit card demand of small firms, using firm‐level data from the 1995 Credit, Banks, and Small Business Survey, conducted by the National Federation of Independent Business. We find that firms increase their demand for trade credit and credit card debt when facing credit constraints imposed by banks. These results provide evidence of a pecking order of debt financing, where firms increase their reliance on potentially expensive sources of funds when bank loans are not available.     

Examination of Conditional Asset Pricing in UK Stock Returns

I examine the empirical performance of various specifications of the capital asset pricing model (CAPM) in UK stock returns, using the stochastic discount framework. When the proxy for the market portfolio includes a proxy for labor income growth in addition to the stock market index, the performance of the CAPM improves. The improvement in performance shows in the magnitude and significance of the pricing errors and in the reduced impact of asset characteristics and other factors in the pricing of assets. There is further improvement when I use conditional versions of the models.     

Structural change in Malawi since independence: Consequences of a development strategy based on large-scale agriculture

This paper investigates the nature of the structural change which has occured in the Malawian economy since independence and identifies key policies pursued by the government which it is argued have been decisive in shaping this development. The salient feature of structural change is shown to be the rapid growth of large-scale agriculture, associated with an equally rapid transfer of labour into wage employment and a decline in the importance of peasant production. The implications of these changes for living standards and future development and policy are considered.     

Sovereign Debt: A Primer

The troublesome debts of a number of developing countries havespawned a large literature on why countries borrow, on the extentto which debt contributes to growth, on why countries repay,and on how debt problems should be handled. This article providesa basic introduction to some issues in sovereign debt. First,it presents the basic accounting concepts associated with debt.Second, it treats debt as a component of the intertemporal maximizationof a borrower in a competitive loan market facing an intertemporalbudget constraint. Third, it introduces debt into recent modelsof endogenous growth and examines what these models imply aboutthe relationship between debt and growth. Fourth, it discussesissues arising from sovereign risk. Fifth, it examines incentivesto repay. Sixth, it reviews the various options available toa creditor facing a debtor unwilling to meet current debt serviceobligations. Seventh, it examines debt buybacks.     

The World Bank and Poverty: The Plight of the World's Impoverished Is Still a Major Concern of the International Agency.

Abstract . Since the early 1980s, the World Bank has taken on new tasks in addition to its regular development finance function: preventing economic collapse in borrower countries, helping heavily indebted countries cope with their international payments difficulties, and encouraging basic economic policy reform and structural adjustment in developing countries. Many critics worry that, as the World Bank has taken on these new responsibilities, it has lessened its concern about poverty. The Bank and its friends argue that poverty alleviation remains a central element of the Bank's agenda, but the world situation is different than it was during the 1970s and new kinds of action are needed today. The Bank believes that economic reform and structural adjustments are crucial elements of a modern anti-poverty program. Many critics believe that structural adjustment programs may seriously hurt the poor. Exploring the arguments and reporting the ways the World Bank has sought to respond to this controversy, the author concludes that the issue is a fundamental disagreement about whether the new modes of Bank lending and the Bank's new policy emphasis will have a positive or negative effect on the poor.