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Credit Traps and Credit Cycles Author info | Abstract | Publisher info | Download info | Related research | Statistics Kiminori Matsuyama
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We develop a simple macroeconomic model of credit market imperfections with heterogeneous investment projects. The projects differ in productivity, the investment requirement, and the severity of agency problems behind the borrowing constraints. A movement in borrower net worth shifts the composition of the credit between projects with different productivity levels, thereby causing endogenous investment-specific technological change. Furthermore, such endogenous technological change in turn affects borrower net worth. These composition effects could give rise to credit traps, credit collapse, leapfrogging, credit cycles, and growth miracles in the dynamics of the aggregate investment and borrower net worth. (JEL E22, E44, O33)
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Article provided by American Economic Association in its journal American Economic Review .
Volume (Year): 97 (2007)
Issue (Month): 1 (March)
Pages: 503-516
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Handle: RePEc:aea:aecrev:v:97:y:2007:i:1:p:503-516Contact details of provider: Email: Web page: http://www.aeaweb.org/aer/ More information through EDIRC
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Hart, Oliver & Moore, John, 1994.
"A Theory of Debt Based on the Inalienability of Human Capital ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 109(4), pages 841-79, November.
[Downloadable!] (restricted)
Other versions:
Oliver Hart & John Moore, 1991.
"A Theory of Debt Based on the Inalienability of Human Capital ,"
STICERD - Theoretical Economics Paper Series
233, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
Hart, O. & Moore, J., 1991.
"A Theory of Debt Based on the Inalienability of Human Capital ,"
Working papers
592, Massachusetts Institute of Technology (MIT), Department of Economics.
Oliver Hart & John Moore, 1995.
"A Theory of Debt Based on the Inalienability of Human Capital ,"
NBER Working Papers
3906, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Kiminori Matsuyama, 2004.
"The Good, The Bad, and The Ugly: An Inquiry into the Causes and Nature of Credit Cycles ,"
Discussion Papers
1391, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
[Downloadable!]
Other versions: Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997.
"Long-Run Implications of Investment-Specific Technological Change ,"
American Economic Review ,
American Economic Association, vol. 87(3), pages 342-62, June.
[Downloadable!] (restricted)
Other versions:
Greenwood, J. & Hercowitz, Z. & Krusell, P., 1996.
"Long-Run Implications of Investment-Specific Technological Change ,"
RCER Working Papers
420, University of Rochester - Center for Economic Research (RCER).
Greenwood, J. & Hercowitz, Z. & Krusell, P., 1995.
"Long-Run Implications of Investment-Specific Technological Change ,"
UWO Department of Economics Working Papers
9510, University of Western Ontario, Department of Economics.
Azariadis, Costas & Smith, Bruce, 1998.
"Financial Intermediation and Regime Switching in Business Cycles ,"
American Economic Review ,
American Economic Association, vol. 88(3), pages 516-36, June.
[Downloadable!] (restricted)
Kiyotaki, Nobuhiro, 1988.
"Multiple Expectational Equilibria under Monopolistic Competition ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 103(4), pages 695-713, November.
[Downloadable!] (restricted)
Kiminori Matsuyama, 2002.
"Financial Market Globalization, Symmetry-Breaking, and Endogenous Inequality of Nations ,"
CIRJE F-Series
CIRJE-F-186, CIRJE, Faculty of Economics, University of Tokyo.
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Kiminori Matsuyama, 2004.
"Credit Market Imperfections and Patterns of International Trade and Capital Flows ,"
CIRJE F-Series
CIRJE-F-293, CIRJE, Faculty of Economics, University of Tokyo.
[Downloadable!]
Other versions:
Kiminori Matsuyama, 2004.
"Credit Market Imperfections and Patterns of International Trade and Capital Flows ,"
Discussion Papers
1389, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
[Downloadable!] Kiminori Matsuyama, 2005.
"Credit Market Imperfections and Patterns of International Trade and Capital Flows ,"
Journal of the European Economic Association ,
MIT Press, vol. 3(2-3), pages 714-723, 04/05.
[Downloadable!] (restricted) Gabriel Jiménez & Steven Ongena & José Luis Peydró & Jesús Saurina, 2009.
"Hazardous times for monetary policy: What do twenty-three million bank loans say about the effects of monetary policy on credit risk-taking? ,"
Banco de España Working Papers
0833, Banco de España.
[Downloadable!]
Herrala, Risto, 2009.
"Credit crunch? An empirical test of cyclical credit policy ,"
Research Discussion Papers
10/2009, Bank of Finland.
[Downloadable!]
Hirano, Tomohiro, 2009.
"Financial Development and Amplification ,"
MPRA Paper
16907, University Library of Munich, Germany.
[Downloadable!]
Kenza Benhima, 2008.
"A Reappraisal of the Allocation Puzzle through the Portfolio Approach ,"
EconomiX Working Papers
2008-27, University of Paris West - Nanterre la Défense, EconomiX.
[Downloadable!]
Dell''Ariccia, Giovanni & Igan, Deniz & Laeven, Luc, 2008.
"Credit Booms and Lending Standards: Evidence From The Subprime Mortgage Market ,"
CEPR Discussion Papers
6683, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions: Óscar Arce & José Manuel Campa & Ángel Gavilán, 2009.
"Asymmetric collateral requirements and output composition ,"
Banco de España Working Papers
0837, Banco de España.
[Downloadable!]
Christian Ahlin & Neville Jiang, 2005.
"Can Micro-Credit Bring Development? ,"
Working Papers
05019, Department of Economics, Vanderbilt University.
[Downloadable!]
Patrick-Antoine Pintus, 2009.
"Credit Market Frictions And The Amplification-Persistence Trade-Off ,"
Working Papers
halshs-00353602_v1, HAL.
[Downloadable!]
Costas Azariadis & Leo Kaas, 2009.
"Capital misallocation and aggregate factor productivity ,"
Working Papers
2009-028, Federal Reserve Bank of St. Louis.
[Downloadable!]
Other versions: Jiménez, Gabriel & Ongena, Steven & Peydró-Alcalde, José Luis & Saurina, Jesús, 2007.
"Hazardous Times for Monetary Policy: What Do Twenty-Three Million Bank Loans Say About the Effects of Monetary Policy on Credit Risk? ,"
CEPR Discussion Papers
6514, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
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