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Credit Rationing, Profit Accumulation and Economic Growth

Author

Listed:
  • Amable, Bruno

    (The American University of Paris)

  • Jean-Bernard Chatelain
  • Kirsten RALF

Abstract

This paper studies how credit rationing affects endogenous growth when capital and debt are related to the firm's internal net worth, taken as collateral. The accumulation of firm's net worth determines the growth rate of capital and the growth rate of the economy. The relation between growth and interest rate is then negative without requiring convex adjustment costs on investment.

Suggested Citation

  • Amable, Bruno & Jean-Bernard Chatelain & Kirsten RALF, 2002. "Credit Rationing, Profit Accumulation and Economic Growth," Royal Economic Society Annual Conference 2002 5, Royal Economic Society.
    • Handle: RePEc:ecj:ac2002:5
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    Cited by:

    1. Orlando Gomes, 2010. "Deterministic randomness in a model of finance and growth," Journal of Evolutionary Economics, Springer, vol. 20(1), pages 95-114, January.
    2. Hyejin Cho, 2017. "Economics Of Regulation: Credit Rationing And Excess Liquidity," Post-Print hal-01375423, HAL.
    3. Gomes, Orlando, 2007. "Nonlinear dynamics in a model of financial development with a risk premium," MPRA Paper 2887, University Library of Munich, Germany.
    4. Jean‐Bernard Chatelain, 2010. "The Profit–Investment–Unemployment Nexus And Capacity Utilization In A Stock‐Flow Consistent Model," Metroeconomica, Wiley Blackwell, vol. 61(3), pages 454-472, July.
    5. Chatelain, Jean-Bernard & Ralf, Kirsten & Amable, Bruno, 2010. "Patents as Collateral," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 34(6), pages 1094-1104.
    6. Jean-Bernard Chatelain, 2003. "Structural modelling of financial constraints on investment: where do we stand?," Chapters, in: Paul Butzen & Catherine Fuss (ed.), Firms’ Investment and Finance Decisions, chapter 2, pages 40-58, Edward Elgar Publishing.
    7. Orlando Costa Gomes, 2009. "Constraints On Credit, Consumer Behaviour And The Dynamics Of Wealth," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 54(182), pages 119-132, July – Se.
    8. Jean-Bernard Chatelain, 2002. "Structural modelling of investment and financial constraints: Where do we stand?," Working Paper Research 28, National Bank of Belgium.
    9. Gomes, Orlando, 2010. "On the Allocation of Credit and Aggregate Fluctuations," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(4), December.
    10. Ciałowicz, Beata, 2014. "The phenomenon of equifinality in innovative development of the monetary private ownership economy —An axiomatic set-up," Economic Modelling, Elsevier, vol. 38(C), pages 1-5.

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