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Credit rationing, profit accumulation and economic growth

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Author Info

  • Jean-Bernard Chatelain

    () (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Bruno Amable

    () (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Kirsten Ralf

    () (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris)

Abstract

This paper studies how credit rationing affects endogenous growth when capital and debt are related to the firm´s internal net worth, taken as collateral. The accumulation of firm´s net worth determines the growth rate of capital and the growth rate of the economy. The relation between growth and interest rate is then negative without requiring convex adjustment costs on investment.

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Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00112521.

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Date of creation: 2004
Date of revision:
Publication status: Published, Economics Letters, 2004, 117, 4, 301-307
Handle: RePEc:hal:cesptp:halshs-00112521

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00112521
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Related research

Keywords: Endogenous growth; investment; credit rationing;

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References

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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  2. Kiyotaki, Nobuhiro & Moore, John, 1997. "Credit Cycles," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 211-48, April.
  3. Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Public Finance in Models of Economic Growth," CEPR Discussion Papers 630, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. Gomes, Orlando, 2007. "Deterministic randomness in a model of finance and growth," MPRA Paper 2888, University Library of Munich, Germany.
  2. Orlando Gomes, 2010. "On the Allocation of Credit and Aggregate Fluctuations," Revista Brasileira de Economia, Graduate School of Economics, Getulio Vargas Foundation (Brazil), vol. 64(4), pages 393-404, December.
  3. Gomes, Orlando, 2007. "Nonlinear dynamics in a model of financial development with a risk premium," MPRA Paper 2887, University Library of Munich, Germany.
  4. Jean-Bernard Chatelain, 2010. "The Profit-Investment-Unemployment nexus and Capacity Utilization in a Stock-Flow Consistent Model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00645155, HAL.
  5. Chatelain, Jean-Bernard & Ralf, Kirsten & Bruno, Amable, 2010. "Patents as Collateral," MPRA Paper 44698, University Library of Munich, Germany.
  6. Jean-Bernard Chatelain, 2003. "Structural Modelling of Financial Constraints on Investment: Where Do We Stand?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00112522, HAL.
  7. Gomes, Orlando, 2007. "Constraints on credit, consumer behaviour and the dynamics of wealth," MPRA Paper 2886, University Library of Munich, Germany.

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