| Title | Convergence, financial development, and policy analysis |
| Authors | Lin, Justin Yifu Miao, Jianjun Wang, Pengfei |
| Affiliation | Peking Univ, Inst New Struct Econ, 165 Langrunyuan, Beijing 100871, Peoples R China Boston Univ, Dept Econ, 270 Bay State Rd, Boston, MA 02215 USA Hong Kong Univ Sci & Technol, Dept Econ, Clear Water Bay, Hong Kong, Peoples R China Southwestern Univ Finance & Econ, ICFS, Chengdu, Peoples R China Cent Univ Finance & Econ, CEMA, Beijing, Peoples R China |
| Keywords | RESEARCH-AND-DEVELOPMENT ENDOGENOUS GROWTH ECONOMIC-GROWTH INTERMEDIATION INFLATION CHOICE MONEY |
| Issue Date | Apr-2020 |
| Publisher | ECONOMIC THEORY |
| Abstract | We study the relationship among inflation, economic growth, and financial development in a Schumpeterian overlapping generations model with credit constraints. In the baseline case, money is super-neutral. When the financial development exceeds some critical level, the economy catches up and then converges to the growth rate of the world technology frontier. Otherwise, the economy converges to a poverty trap with a growth rate lower than the frontier and with inflation decreasing with the level of financial development. We then study efficient allocation and identify the sources of inefficiency in a market equilibrium. We show that a particular combination of monetary and fiscal policies can make a market equilibrium attain the efficient allocation. |
| URI | http://hdl.handle.net/20.500.11897/587432 |
| ISSN | 0938-2259 |
| DOI | 10.1007/s00199-019-01181-z |
| Indexed | SSCI Scopus |
| Appears in Collections: | 待认领 |
