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Finance and Economic Growth in a Dynamic Game

Author

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  • Takuma Kunieda

    (Kwansei Gakuin University)

  • Kazuo Nishimura

    (Kobe University
    Trade and Industry (RIETI))

Abstract

We investigate how the relaxation of financial constraints affects economic growth in a dynamic game of the tragedy of the commons by introducing an imperfect financial market into Tornell and Velasco’s (J Polit Econ 100(6):1208–1231, 1992) model. It is shown that whereas the relaxation of financial constraints enhances economic growth if agents have access only to a common asset whose property rights are not secure, the relaxation of financial constraints reduces economic growth if agents can have access not only to a common asset but also to a private asset whose property rights are secure.

Suggested Citation

  • Takuma Kunieda & Kazuo Nishimura, 2018. "Finance and Economic Growth in a Dynamic Game," Dynamic Games and Applications, Springer, vol. 8(3), pages 588-600, September.
    • Handle: RePEc:spr:dyngam:v:8:y:2018:i:3:d:10.1007_s13235-018-0249-7
    DOI: 10.1007/s13235-018-0249-7
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    References listed on IDEAS

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    Cited by:

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    2. Steffen Jørgensen & Ngo Long & Gerhard Sorger, 2018. "Preface: Special issue of Dynamic Games and Applications in Memory of Professor Engelbert J. Dockner," Dynamic Games and Applications, Springer, vol. 8(3), pages 457-467, September.
    3. Hao Fu & Yue Liu & Pengfei Cheng & Sijie Cheng, 2022. "Evolutionary Game Analysis on Innovation Behavior of Digital Financial Enterprises under the Dynamic Reward and Punishment Mechanism of Government," Sustainability, MDPI, vol. 14(19), pages 1-18, October.

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    More about this item

    Keywords

    Dynamic game; Interest groups; Property rights; Financial market imperfections; Economic growth;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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