haku: @author Kotwal, A. / yhteensä: 3
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| Tekijä: | Eswaran, M. Kotwal, A. |
| Otsikko: | Why are capitalists the bosses? |
| Lehti: | Economic Journal
1989 : MAR, VOL. 99:394, p. 162-176 |
| Asiasana: | CAPITALISM LABOUR ECONOMETRIC MODELS |
| Kieli: | eng |
| Tiivistelmä: | A formal model of a simple classical firm is presented to demonstrate that the moral hazard faced by a lender due to the possibilities of default by borrowers on his loans may provide incentives to the owner of capital (money) to undertake production himself. Using this model the utility-maximizing problem of an entrepreneur is solved who borrows capital, under limited liability, from a capitalist at a given interest rate to acquire hired inputs. The interest rate that maximizes the effective rate of return to the capitalist on his loans is determined. Some interesting implications of the theory are discussed. |
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