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Interactions between Financial Constraints and Economic Growth

Author

Listed:
  • João Jerónimo

    (University of Minho)

  • José Assis de Azevedo

    (University of Minho)

  • Pedro Neves

    (Departamento de Gestão e Economia and CEFAGE-UBI, University of Beira Interior)

  • Maria João Thompson

    (University of Minho and NIPE)

Abstract

Wishing to contribute theoretically to the understanding of the interactions between financial constraints and economic growth, we introduce financial dynamics in the R&D-based growth literature, by developing a generalization of Romer’s (1990) growth model, in which the original framework arises as a special case. We find that the overall effects of informational asymmetries on growth are negative, whilst asymptotically tending to null as our introduced financial parameter tends to zero.

Suggested Citation

  • João Jerónimo & José Assis de Azevedo & Pedro Neves & Maria João Thompson, 2021. "Interactions between Financial Constraints and Economic Growth," NIPE Working Papers 15/2021, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:15/2021
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    File URL: http://repositorium.sdum.uminho.pt/handle/1822/75144
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    Cited by:

    1. Jerónimo, J. & Azevedo, Assis & Neves, P.C. & Thompson, M., 2023. "Interactions between financial constraints and economic growth," The North American Journal of Economics and Finance, Elsevier, vol. 67(C).

    More about this item

    Keywords

    Financial constraints; Economic growth;

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • E - Macroeconomics and Monetary Economics

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