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Endogenous Growth and Fluctuations in an Overlapping Generations Economy with Credit Market Imperfections

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  • Kunieda, Takuma
  • Shibata, Akihisa

Abstract

We study the dynamic properties of growth rates in an overlapping generations economy with credit market imperfections. The analysis demonstrates that in early stages of financial development where credit constraints are severe, growth rates evolve monotonically. At the intermediate level of financial development, as the degree of credit market imperfections diminishes, growth rates exhibit endogenous fluctuations for some parameter values. However, as the financial sector matures, fluctuations disappear and the growth rates evolve once again monotonically.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35698.

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Date of creation: Dec 2011
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Publication status: Published in Asia-Pacific Journal of Accounting and Economics No.3.Vol.18(2011): pp. 333-357
Handle: RePEc:pra:mprapa:35698

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Keywords: Credit market imperfections; Endogenous business fluctuations; Endogenous growth; Heterogeneous agents;

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Cited by:
  1. Kunieda, Takuma & Shibata, Akihisa, 2012. "Business Cycles and Financial Crises: A Model of Entrepreneurs and Financiers," MPRA Paper 40310, University Library of Munich, Germany.

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