An Economic Framework for Understanding Micro-Credit in Developing Countries

To reduce vulnerability and food insecurity this paper investigates the economics of micro-credit. We provide a model that shows how a micro-credit market based on trust can co-exist with a commercial collateral-based market. This model is developed in detail and certain propositions are supported using dominant strategies in a trust-honour game based on the prisoners dilemma. From a policy point of view the theoretical model indicates that trust-based lending, coupled with certain incentives, can go far in supporting growth opportunities in developing countries. It is argued that development policy should be flexible enough to permit trust-based micro-lending to the poor, regardless of how counter-intuitive this must appear to the conventional wisdom.Financial Economics,

Vulnerability, Trust and Microcredit: The Case of China?s Rural Poor

This paper investigates the economic conditions of rural households in China. Historical survey data indicate that over 80 per cent of rural households earn less than 4,500 yuan in net disposable income each year, that for the vast majority of rural households disposable income is insufficient to meet food consumption needs, and that in terms of economic growth rural households are receiving an ever decreasing percentage of China?s growing economy with rural household incomes being only 31 per cent of urban household income in 2004. To reduce vulnerability and food insecurity, this paper investigates the role of microcredit in China. It is argued that in China the conventional wisdom is to provide credit using traditional means, but we provide a model that shows how a microcredit market based on trust can co-exist with a commercial collateral-based market. This model is developed in detail and certain propositions are supported using dominant strategies in a trust-honour game based on the prisoner?s dilemma. The theoretical model is then applied to the case of microlending in China. It explains why, in the absence of trust, rural credit corporations do not make loans to the very poor. Furthermore, the model explains how Central party policies on rural credit can actually crowd out micro finance institution (MFI) and NGO microlending in China, and also explains why moneylenders dominate in many of the poorer regions of the country. From a policy point of view, the theoretical model indicates that trust-based lending, coupled with certain incentives, can go far in supporting growth opportunities in rural China. It is argued that Chinese policy should be flexible enough to permit trust-based microlending to the poor, regardless of how counterintuitive this must appear to the conventional wisdom. Indeed, in the absence of flexible credit strategies, China?s rural poor will remain in a persistent food-insecure poverty gap.equilibrium, game theory, rural, credit, China

Time-Periodic Solutions of the Einstein's Field Equations II

In this paper, we construct several kinds of new time-periodic solutions of the vacuum Einstein's field equations whose Riemann curvature tensors vanish, keep finite or take the infinity at some points in these space-times, respectively. The singularities of these new time-periodic solutions are investigated and some new physical phenomena are found. The applications of these solutions in modern cosmology and general relativity can be expected.Comment: 10 pages, 1 figur

Weather Risk and the Viability of Weather Insurance In Western China

This paper presents preliminary results on the possible demand for weather insurance in China. Results from 1,564 farm households from Western and Central China between October 2007 and October 2008 suggest that the greater risk for farmers is drought followed by excessive rain. Heat is less critical as a risk but more significant than cool weather. Results suggest a strong interest in precipitation insurance with 50% and 44% of respondents indicating strong interest in the product. Supplementary results indicate that interest is equal between planting, cultivating, and harvesting. Furthermore results suggest that farmers are willing to adopt new ideas, and where possible already take action to self insure through diversification and other means, The results are encouraging. Examples and discussion of how weather insurance can be implemented is included in the text.weather insurance, rainfall insurance, China, Agricultural and Food Policy, Agricultural Finance, International Development, Risk and Uncertainty,

Scanning Tunneling Spectroscopy of Suspended Single-Wall Carbon Nanotubes

We have performed low-temperature STM measurements on single-wall carbon nanotubes that are freely suspended over a trench. The nanotubes were grown by CVD on a Pt substrate with predefined trenches etched into it. Atomic resolution was obtained on the freestanding portions of the nanotubes. Spatially resolved spectroscopy on the suspended portion of both metallic and semiconducting nanotubes was also achieved, showing a Coulomb-staircase behavior superimposed on the local density of states. The spacing of the Coulomb blockade peaks changed with tip position reflecting a changing tip-tube capacitance

Risk Rationing in China Rural Credit Markets

The purpose of this paper is to provide a specific test of Boucher, Carter et al. (2008) framework on risk rationing. The data were collected through a survey of 730 farm households in Shaanxi province conducted in November 2010. We compare factor associated with risk rationed, quantity rationed and price rationed farmers. Seemingly unrelated regressions are performed using risk rationing, quantity rationing and price rationing measure as the dependent variable and measures of demography, wealth, income, year of farming and risk aversion as independent variables. We apply seemingly unrelated regression, cluster analysis and cross tabulation in the study. According to a seemingly unrelated regression, we find existing risk rationing is due to risk-based behavior by borrowers. A cross tabulation results support the proposition by Boucher, Carter et al showing the financial wealthy is risk rationed and relatively land-poor is risk rationed. This paper is believed to be among the first empirical validation of the risk rationing theory.Risk rationing, credit market, china, Marketing, Risk and Uncertainty,