AN ANALYSIS OF SMALL BUSINESS LOAN GUARANTEE FUNDS

Small businesses are considered important engines for job growth and economic development by policy makers worldwide. One of the most commonly cited constraints of small businesses is a lack of access to capital. To address this constraint, small business loan guarantee programs have been established in over 100 countries. There are a variety of types of guarantee funds, with the most significant differences being which borrowers are eligible for guarantees, and how borrowers are approved for guarantees. There is currently no clear delineation between types of programs and the economic conditions they operate in, though some trends are becoming apparent. However, these trends may not be leading to the best economic outcomes possible. By better matching the structure of the guarantee fund to the economic conditions it operates in, the program’s success in meeting economic development goals may be greatly improved. Many programs in developing countries may not be taking advantage of bank expertise and may be limiting the scope of their effectiveness. At the same time, programs in developed countries may be wasting resources by scattering their efforts too thinly and subsidizing less competitive firms to the detriment of local economic development.

Optimization of Amplifier Placements in Switch-Based Optical Networks

Wavelength division multiplexing (WDM) offers a solution to the problem of exploiting the large bandwidth on optical links; it is the current favorite multiplexing technology for optical communication networks. Due to the high cost of an optical amplifier, it is desirable to strategically place the amplifiers throughout the network in a way that guarantees that all the signals are adequately amplified while minimizing the total number amplifiers being used. Previous studies all consider a star-based network. This paper demonstrates an original approach for solving the problem in switch-based WDM optical network assuming the traffic matrix is always the permutation of the nodes. First we formulate the problem by choosing typical permutations which can maximize traffic load on individual links; then a GA (Genetic Algorithm) is used to search for feasible amplifier placements. Finally, by setting up all the lightpaths without violating the power constaints we confirm the feasibility of the solution.

Tiered Pricing and Cost Functions: Are Equity, Cost Recovery and Economic Efficiency Compatible Goals?

Suppliers of water and energy are frequently natural monopolies, with their pricing regulated by governmental agencies. Pricing schemes are evaluated by the efficiency of the resource allocation they lead to, the capacity of the utilities to capture their costs and the distributional effects of the policies, in particular, impacts on the poor. One pricing approach has been average cost pricing, which guarantees cost recovery and allows utilities to provide their product at relatively low prices. However, average cost pricing leads to economically inefficient consumption levels, when sources of water and energy are limited and increasing the supply is costly. An alternative approach is increasing block rates (hereafter, IBR or tiered pricing), where individuals pay a low rate for an initial consumption block and a higher rate as they increase use beyond that block. An example of IBR is shown in Figure 1 (on next page), which shows a rate structure for residential water use. With the rates in Figure 1, a household would be charged $0.46 and $0.71 per hundred gallons for consumption below and above 21,000 gallons per month, respectively.