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Land Price, Collateral And Economic Growth

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  • MASAYA SAKURAGAWA
  • YUKIE SAKURAGAWA

Abstract

This paper extends Kiyotaki and Moore's (1997) to an endogenous growth model and investigates the dynamic properties of a growing economy with binding credit constraint when land is used not only as an input of production but also as collateral. There exists a balanced growth path in an economy with binding credit constraint. In response to a once and for all productivity shock, the developed model shows the propagation mechanism among output, capital, bank credit and the land price in terms of the growth rate. The model's tractability allows us to derive interesting qualitative and quantitative findings on business cycles.

Suggested Citation

  • Masaya Sakuragawa & Yukie Sakuragawa, 2009. "Land Price, Collateral And Economic Growth," The Japanese Economic Review, Japanese Economic Association, vol. 60(4), pages 473-489, December.
    • Handle: RePEc:bla:jecrev:v:60:y:2009:i:4:p:473-489
    DOI: 10.1111/j.1468-5876.2008.00434.x
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    References listed on IDEAS

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    Cited by:

    1. Stefan Homburg, 2017. "Understanding Benign Liquidity Traps: The Case of Japan," German Economic Review, Verein für Socialpolitik, vol. 18(3), pages 267-282, August.

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