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Investment composition and productivity with heterogeneous entrepreneurs

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  • Uras, Burak R.

Abstract

This paper develops an overlapping generations model of entrepreneurship to analyze the effects of financier patience on aggregate productivity of capital and macroeconomic development. The purpose of the enquiry is to show that while limited financier patience constrains the supply of investable funds allocated at productive long-term entrepreneurial projects and aggregate productivity, financial markets that favor short-term lending do not necessarily retard steady state output. I show that this potential non-linear effect of financier patience exists if entrepreneurial sector of the society consists of economic agents with heterogeneous interests in adopting long-term investment projects.

Suggested Citation

  • Uras, Burak R., 2013. "Investment composition and productivity with heterogeneous entrepreneurs," Journal of Macroeconomics, Elsevier, vol. 35(C), pages 104-116.
    • Handle: RePEc:eee:jmacro:v:35:y:2013:i:c:p:104-116
    DOI: 10.1016/j.jmacro.2012.09.004
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    More about this item

    Keywords

    Financier patience; Capital deepening and productivity;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G2 - Financial Economics - - Financial Institutions and Services
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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