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Credit Rationing, Profit Accumulation and Economic Growth

Author

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  • 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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    References listed on IDEAS

    as
    1. 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.
    2. Robert J. Barro & Xavier Sala-I-Martin, 1992. "Public Finance in Models of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 645-661.
    3. Kiyotaki, Nobuhiro & Moore, John, 1997. "Credit Cycles," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 211-248, April.
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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. 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.
    3. 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.
    4. Amable, Bruno & Chatelain, Jean-Bernard & Ralf, Kirsten, 2010. "Patents as collateral," Journal of Economic Dynamics and Control, Elsevier, vol. 34(6), pages 1092-1104, June.
    5. 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.
    6. Jean-Bernard Chatelain, 2002. "Structural modelling of investment and financial constraints: Where do we stand?," Working Paper Research 28, National Bank of Belgium.
    7. 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.
    8. 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.
    9. Hyejin Cho, 2017. "Economics Of Regulation: Credit Rationing And Excess Liquidity," Post-Print hal-01375423, HAL.
    10. Gomes, Orlando, 2007. "Nonlinear dynamics in a model of financial development with a risk premium," MPRA Paper 2887, University Library of Munich, Germany.

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