Credit rationing, profit accumulation and economic growth
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.
|Date of creation:||2004|
|Publication status:||Published in Economics Letters, Elsevier, 2004, 117 (4), pp.301-307. <10.1016/j.econlet.2004.03.034>|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00112521|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
References listed on IDEAS
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- Nobuhiro Kiyotaki & John Moore, 1995.
NBER Working Papers
5083, National Bureau of Economic Research, Inc.
- Barro, Robert J. & Sala-i-Martin, Xavier, 1992.
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630, C.E.P.R. Discussion Papers.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-1037, October.
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