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Credit constraints and the process of development


  • Nishida, Keigo


This paper presents an extension of the model in Jaimovich [Jaimovich, E., 2010. Adverse selection and entrepreneurship in a model of development. Scandinavian Journal of Economics 112, 77–100] and generalizes his results by relaxing key assumptions in his analysis.

Suggested Citation

  • Nishida, Keigo, 2012. "Credit constraints and the process of development," Economics Letters, Elsevier, vol. 116(3), pages 281-283.
  • Handle: RePEc:eee:ecolet:v:116:y:2012:i:3:p:281-283 DOI: 10.1016/j.econlet.2011.12.048

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    References listed on IDEAS

    1. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-298, April.
    2. Larson, Donald & Mundlak, Yair, 1997. "On the Intersectoral Migration of Agricultural Labor," Economic Development and Cultural Change, University of Chicago Press, vol. 45(2), pages 295-319, January.
    3. Philippe Aghion & Peter Howitt & David Mayer-Foulkes, 2005. "The Effect of Financial Development on Convergence: Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 173-222.
    4. Esteban Jaimovich, 2010. "Adverse Selection and Entrepreneurship in a Model of Development," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(1), pages 77-100, March.
    5. Philippe Aghion & Patrick Bolton, 1997. "A Theory of Trickle-Down Growth and Development," Review of Economic Studies, Oxford University Press, vol. 64(2), pages 151-172.
    6. Kiminori Matsuyama, 2007. "Credit Traps and Credit Cycles," American Economic Review, American Economic Association, vol. 97(1), pages 503-516, March.
    7. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    8. Kunieda, Takuma, 2008. "Asset bubbles and borrowing constraints," Journal of Mathematical Economics, Elsevier, vol. 44(2), pages 112-131, January.
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    More about this item


    Credit constraint; Moral hazard; Sectoral shift; Poverty trap;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance


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