SELECTIVE CREDIT POLICY: IS IT JUSTIFIED AND CAN IT WORK?

The ultimate objective of selective credit policies is to influence the composition of real investment, and not merely to influence financial markets. Although various forms of selective credit policies have been in use in the U.S.A. for many decades, there has been relatively little systematic investigation of the extent to which this ultimate objective can be realized. In this paper, we attempt to examine the theoretical and empirical justification for using selective credit policies; specify the structural conditions under which such policies might be expected to achieve their real objective; and look at the empirical evidence to determine whether or not these conditions are satisfied in one specific area where selective credit policies have been proposed. [ABSTRACT FROM AUTHOR]