Optimal Credit Rationing in Not-For-Profit Financial Institutions

We examine the dynamic optimization problem for not-for-profit financial institutions (NFPs) that maximize consumer surplus, not profits. We characterize the optimal dynamic policy and find that it involves credit rationing. Interest rates set by mature NFPs will typically be more favorable to customers than market rates, as any surplus is distributed in the form of interest rate subsidies, with credit rationing being required to prevent these subsidies from distorting loan volumes from their optimal levels. Rationing overcomes a fundamental problem in NFPs; it allows them to distribute the surplus without distorting the volume of activity from the efficient level.

Graphs of relations and Hilbert series

We are discussing certain combinatorial and counting problems related to quadratic algebras. First we give examples which confirm the Anick conjecture on the minimal Hilbert series for algebras given by $n$ generators and $\frac {n(n-1)}{2}$ relations for $n \leq 7$. Then we investigate combinatorial structure of colored graph associated to relations of RIT algebra. Precise descriptions of graphs (maps) corresponding to algebras with maximal Hilbert series are given in certain cases. As a consequence it turns out, for example, that RIT algebra may have a maximal Hilbert series only if components of the graph associated to each color are pairwise 2-isomorphic.