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The Welfare Effects of Liquidity Constraints Author info | Abstract | Publisher info | Download info | Related research | Statistics Jappelli, Tullio
Pagano, Marco
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The authors analyze the welfare implications of liquidity constraints for households in an overlapping generations model with growth. In a closed economy with exogenous technical progress, liquidity constraints reduce welfare if the economy is dynamically inefficient. But, if it is dynamically efficient, some degree of financial repression is required to maximize steady-state utility, even though some generations are hurt in the transition. With endogenous technical progress, financial repression may increase welfare even along the transition path, thus leading to a Pareto improvement. In this case, the optimal degree of financial repression increases as the economy grows. Copyright 1999 by Royal Economic Society.
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Article provided by Oxford University Press in its journal Oxford Economic Papers .
Volume (Year): 51 (1999)
Issue (Month): 3 (July)
Pages: 410-30
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Handle: RePEc:oup:oxecpp:v:51:y:1999:i:3:p:410-30Contact details of provider: Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK Fax: 01865 267 985 Email: Web page: http://oep.oupjournals.org/
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Paper Tullio Jappelli & Marco Pagano, 1998.
"The Welfare Effects of Liquidity Constraints ,"
CSEF Working Papers
13, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
[Downloadable!] Jappelli, Tullio & Pagano, Marco, 1995.
"The Welfare Effects of Liquidity Constraints ,"
CEPR Discussion Papers
1108, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) 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.: Azariadis, Costas & Reichlin, Pietro, 1996.
"Increasing returns and crowding out ,"
Journal of Economic Dynamics and Control ,
Elsevier, vol. 20(5), pages 847-877, May.
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Pagano, Marco, 1993.
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Andrew B. Abel & N. Gregory Mankiw & Lawrence H. Summers & Richard J. Zeckhauser, 1989.
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Andrew Abel & Gregory N. Mankiw & Lawrence H. Summers & Richard Zeckhauser, .
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Rodney L. White Center for Financial Research Working Papers
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Bencivenga, Valerie R & Smith, Bruce D, 1992.
"Deficits, Inflation, and the Banking System in Developing Countries: The Optimal Degree of Financial Repression ,"
Oxford Economic Papers ,
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Other versions: Devereux, Michael B & Smith, Gregor W, 1994.
"International Risk Sharing and Economic Growth ,"
International Economic Review ,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(3), pages 535-50, August.
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Other versions: De Gregorio, Jose, 1996.
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Imrohoruglu, Ayse, 1989.
"Cost of Business Cycles with Indivisibilities and Liquidity Constraints ,"
Journal of Political Economy ,
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Roubini, Nouriel & Sala-i-Martin, Xavier, 1992.
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Other versions: Jappelli, Tullio & Pagano, Marco, 1994.
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[Downloadable!] (restricted) J. Manrique & K. Ojah, 2004.
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Taylor and Francis Journals, vol. 36(8), pages 781-791, May.
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Wigger, Berthold U., 2000.
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[Downloadable!] Wigger, Berthold U, 2001.
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