Government Expenditure in Enforcing the Law, Financial Intermediation and Development

This file is part of IDEAS, which uses RePEc data

Government Expenditure in Enforcing the Law, Financial Intermediation and Development

Author Info

Fernando Perera Tallo (CAERP and Universidad de La Laguna)

Additional information is available for the following registered author(s):

Fernando Perera-Tallo

Abstract

This paper presents a neoclassical growth model with financial intermediation in which government expenditure is used to enforce the law. Government expenditure increases the probability that the financial contract are enforced and reduces financial intermediation costs. There is a feed back process: low per capita capital involves low government expenditure and low probability of enforcing financial contracts, which reduces the incentives to accumulate capital. As a consequence of this feed back process there are three steady states: one without financial intermediation and low per capita capital, another with low probability of enforcing the financial contract and medium per capita capital and other with high probability of enforcing the contract and high per capita capital. The dynamic around the steady state with low enforcing probability is characterized by multiple equilibria and cyclical behavior, the dynamics around the two others steady states presents the typical saddle point dynamics.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info
Paper provided by Centro de Altisimos Estudios Rios Perez (CAERP) in its series Centro de Altisimos Estudios Rios Pe©rez(CAERP) with number 10.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 30 pages
Date of creation: Feb 2003
Date of revision:
Handle: RePEc:cae:caerpp:10

Contact details of provider:
Postal: Calle P�rez de Rosas 4, Santa Cruz de Tenerife 38004
Web page: http://www.caerp.com/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Jose-Victor Rios-Rull).

Related research
Keywords:

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-05-15 (All new papers)
NEP-DGE-2003-05-15 (Dynamic General Equilibrium)
NEP-MFD-2003-05-15 (Microfinance)

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.:

Quah, Danny T, 1997. " Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," Journal of Economic Growth, Springer, vol. 2(1), pages 27-59, March. [Downloadable!] (restricted)
Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Saint-Paul, Gilles, 1992. "Technological choice, financial markets and economic development," European Economic Review, Elsevier, vol. 36(4), pages 763-781, May. [Downloadable!] (restricted)
Other versions:
- Saint-Paul, G., 1990. "Technological Choice, Financial Markets and Economic Development," DELTA Working Papers 90-30, DELTA (Ecole normale supérieure).
Bencivenga, Valerie R & Smith, Bruce D, 1991. "Financial Intermediation and Endogenous Growth," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 195-209, April. [Downloadable!] (restricted)
Other versions:
- Bencivenga, V.R. & Smith, B.D., 1988. "Financial Intermediation And Endogenous Growth," RCER Working Papers 124, University of Rochester - Center for Economic Research (RCER).
Cooley, T.F. & Smith, B.D., 1991. "Financial Markets, Specialization, and Learning by Doing," RCER Working Papers 276, University of Rochester - Center for Economic Research (RCER).
Other versions:
- Cooley, T-F & Smith, B-D, 1993. "Financial Markets, Specialization, and Learning by Doing," Papers 93-01, Rochester, Business - Quantitative Methods Working Paper Series.
- Cooley, Thomas F. & Smith, Bruce D., 1998. "Financial markets, specialization, and learning by doing," Research in Economics, Elsevier, vol. 52(4), pages 333-361, December. [Downloadable!] (restricted)
King, Robert G & Levine, Ross, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 717-37, August. [Downloadable!] (restricted)
Other versions:
- King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank. [Downloadable!]
- King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank. [Downloadable!]
Roubini, Nouriel & Sala-i-Martin, Xavier, 1992. "Financial repression and economic growth," Journal of Development Economics, Elsevier, vol. 39(1), pages 5-30, July. [Downloadable!] (restricted)
Other versions:
- Nouriel Roubini & Xavier Sala-i-Martin, 1991. "Financial Repression and Economic Growth," NBER Working Papers 3876, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Greenwood, J. & Jovanovic, B., 1990. "Financial Development, Growth, And The Distribution Of Income," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 9002, University of Western Ontario, The Centre for the Study of International Economic Relations.
Other versions:
- Greenwood, J. & Jovanovic, B., 1988. "Financial Development, Growth, And The Distribution Of Income," RCER Working Papers 131, University of Rochester - Center for Economic Research (RCER).
- Jeremy Greenwood & Boyan Jovanovic, 1989. "Financial Development, Growth, and the Distribution of Income," NBER Working Papers 3189, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Greenwood, Jeremy & Jovanovic, Boyan, 1988. "Financial Development, Growth, And The Distribution Of Income," Working Papers 88-12, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
- Greenwood, Jeremy & Jovanovic, Boyan, 1990. "Financial Development, Growth, and the Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1076-1107, October. [Downloadable!] (restricted)
Ross Levine & Sara Zervos, . "Stock markets, banks and economic growth ," CERF Discussion Paper Series 95-11, Economics and Finance Section, School of Social Sciences, Brunel University.
Other versions:
- Levine, Ross & Zervos, Sara, 1996. "Stock markets, banks, and economic growth," Policy Research Working Paper Series 1690, The World Bank. [Downloadable!]
- Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-58, June. [Downloadable!] (restricted)
Raghuram G. Rajan & Luigi Zingales, 1996. "Financial Dependence and Growth," NBER Working Papers 5758, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Raghuram G. Rajan & Luigi Zingales, . "Financial Dependence and Growth," CRSP working papers 344, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-86, June. [Downloadable!] (restricted)
Acemoglu, Daron & Zilibotti, Fabrizio, 1996. "Was Prometheus Unbound by Chance? Risk, Diversification and Growth," CEPR Discussion Papers 1426, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Daron Acemoglu & Fabrizio Zilibotti, 1994. "Was Prometheus Unbound by Chance? Risk, Diversification and Growth," Economics Working Papers 98, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
- Acemoglu, Daron & Zilibotti, Fabrizio, 1997. "Was Prometheus Unbound by Chance? Risk, Diversification, and Growth," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 709-51, August.

Full references

Cited by:
(explanations, 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.)

Betty Agnani & Amaia Iza, 2005. "Growth in an oil abundant economy: The case of Venezuela," DFAEII Working Papers 200515, University of the Basque Country - Department of Foundations of Economic Analysis II. [Downloadable!]
Other versions:
- Betty Agnani & Amaia Iza, 2005. "Growth in an oil abundant economy: The case of Venezuela," DEGIT Conference Papers c010_053, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
- Bety Agnany & Amaia Iza, 2008. "Growth in an oil abundant economy: The case of Venezuela," ThE Papers 08/18, Department of Economic Theory and Economic History of the University of Granada.. [Downloadable!]

Statistics

Access and download statistics

Did you know? RePEc data is maintained by each archive holder on its own website. Nothing is held centrally.

This page was last updated on 2009-11-25.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.