On financial frictions and firm's market power
研究了垄断竞争模型中市场势力对福利的两种相反效应：企业加价导致产出损失，但更高预期利润和违约减少带来收益，并发现最优市场势力水平随清算效率递减，道德风险下信贷配给降低违约率并缓解金融摩擦的福利成本。
Abstract There are two opposing welfare effects of market power in a model with monopolistic competition, loan defaults and moral hazard. The loss of output produced if firms set a higher mark‐up over marginal costs confronts with some gain due to higher expected profits and the reduction of defaults. Such tradeoff results in an optimal level of market power that decreases with the efficiency of liquidation following default on a loan. If moral hazard is pervasive, credit rationing cuts down the default rates and mitigates the welfare cost of financial frictions.