Croissance et finance
Various attempts have been made recently at explaining why productivity differences persist between rich and poor countries, and why some countries diverge from the world technology frontier in terms of their per capita GDP levels or growth rates, while other countries manage to catch up with the world frontier. We explore the role of credit market imperfections in explaining cross-country growth performance and cross-country convergence and divergence, following Lucas’s observation that capital does not flow from rich to poor countries even though the marginal return to capital is higher in the latter. We also analyse the interplay between credit market imperfections and macroeconomic policies. We show that interacting financial development with macroeconomic variables such as average productivity or output volatility in growth and finance regressions generates a rich set of new empirical predictions, e.g. on convergence and divergence, and on the growth effect of countercyclical macroeconomic policies. JEL Classification: F21, F30, F4, F5, G1, O14, O16, O4.
When requesting a correction, please mention this item's handle: RePEc:cai:reofsp:reof_102_0079. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.