Jin, Keyu, Guibaud, Stéphane and Coeurdacier, Nicolas (2011) Credit constraints and growth in a global economy. Finance seminar series, Department of Economics, London School of Economics and Political Science, London, UK.
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We show that in an open-economy OLG model, the interaction between growth diﬀerentials and household credit constraints, more severe in fast-growing countries, can explain three prominent global trends: a divergence in private saving rates between advanced and emerging economies, large net capital outﬂows from the latter, and a sustained decline in the world interest rate. Micro-level evidence on the evolution of age-saving proﬁles in the U.S. and China corroborates our mechanism. Quantitatively, our model explains about 40 percent of the divergence in aggregate saving rates, and a signiﬁcant portion of the variations in age-saving proﬁles across countries and over time.
|Item Type:||Monograph (Working Paper)|
|Additional Information:||© 2011 INSEAD|
|Uncontrolled Keywords:||Globalization, capital ows, credit constraints, current account, demographics, social security.|
|Library of Congress subject classification:||H Social Sciences > HB Economic Theory|
|Journal of Economic Literature Classification System:||F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
F - International Economics > F3 - International Finance > F32 - Current Account Adjustment; Short-Term Capital Movements
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
|Sets:||Departments > Economics
Collections > Economists Online
|Date Deposited:||20 Apr 2011 12:01|
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