Berger, Allen N., and Timothy H. Hannon, The Price-Concentration Relationship in Banking, this REVIEW 71 (May 1989), 291-299. Demsetz, Harold, Industry Structure, Rivalry, and Public Policy, Journal of Law and Economics 16 (Apr. 1973), 1-9. Jackson, William E. III, Market Structure and Price Adjustments: Evidence from the Banking Industry, unpublished Ph.D. dissertation, University of Chicago, June 1989. Peltzman, Samuel, The Gains and Losses from Industrial Concentration, Journal of Law and Economics 20 (Oct. 1977), 229-263. Salinger, Michael, The Concentration-Margins Relationship Reconsidered, in Brookings Papers on Economic Activity: Microeconomics, Martin N. Bailey and Clifford Winston, (eds.), Brookings (Washington, D.C.: Brookings Institution, 1990). 5 No formal statistical tests of the differences in the estimated coefficients of CONC across subsamples were conducted. This analysis was concerned more with the sign and significance level of each subsample estimated CONC coefficient.

This paper examines the credit rationing debate using detailed contract information on over one million commercial bank loans from 1977 to 1988. While commercial loan rates are "sticky," consistent with rationing, this stickiness varies with loan contract terms in ways that are not predicted by equilibrium credit rationing theory. In addition, the proportion of new loans issued under commitment does not increase significantly when credit markets are tight, despite the fact that borrowers without commitments can be rationed whereas commitment borrowers are contractually insulated from rationing. Overall, the data suggest that equilibrium rationing is not a significant macroeconomic phenomenon.

This paper examines the credit rationing debate using detailed contract information on over one million commercial bank loans from 1977 to 1988. While commercial loan rates are "sticky," consistent with rationing, this stickiness varies with loan contract terms in ways that are not predicted by equilibrium credit rationing theory. In addition, the proportion of new loans issued under commitment does not increase significantly when credit markets are tight, despite the fact that borrowers without commitments can be rationed whereas commitment borrowers are contractually insulated from rationing. Overall, the data suggest that equilibrium rationing is not a significant macroeconomic phenomenon.