Arbeitspapier
Growth and business cycles with imperfect credit markets
We study the process of growth and business cycles in an open economy which has access to international ¯nancial markets. The ¯nancial market imperfection originates from costly state veri¯cation and a positive probability of default on loans. The degree of credit market imperfection is endogenously derived. The results show that developed economies are able to borrow on easier terms than emerging countries. The credit market imperfection may cause some economies to fall into a development trap if the initial endowment of capital is too low. The ¯nancial market frictions also generate interesting business cycle dynamics. Financial market imperfections help in replicating the empirical fact that output growth shows positive autocorrelation at short horizons. The model also predicts that a poorer economy will experience a more severe and persistent e®ect on investment and output due to an exogenous shock.
- Sprache
-
Englisch
- Erschienen in
-
Series: ZEI Working Paper ; No. B 29A-2002
- Klassifikation
-
Wirtschaft
Information and Market Efficiency; Event Studies; Insider Trading
Asymmetric and Private Information; Mechanism Design
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- Thema
-
Costly state verification
Credit markets
Growth
Business Cycles
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Chakrabarty, Debajyoti
- Ereignis
-
Veröffentlichung
- (wer)
-
Rheinische Friedrich-Wilhelms-Universität Bonn, Zentrum für Europäische Integrationsforschung (ZEI)
- (wo)
-
Bonn
- (wann)
-
2002
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Chakrabarty, Debajyoti
- Rheinische Friedrich-Wilhelms-Universität Bonn, Zentrum für Europäische Integrationsforschung (ZEI)
Entstanden
- 2002
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