Artur KhachatryanPublished in:
Russian Journal of Entrepreneurship
– № 4-2 / April, 2011



Keywords: competitiveness, credit, crisis, production, production resources, rigidity of prices


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Abstract:

The article carries the idea that credit expansion contributes to increasing production capacities by encouraging the growth of productivity. According to the author, economic recessions that succeed credit booms could be less noticeable when using more flexible pricing mechanisms. But at rigid prices, subject to various institutional factors and strategic behavior of economic agents, the fall in demand will inevitably lead to the simultaneous reduction in the level of production.

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