Credit constraints and growth in a global economy

Jin, Keyu ORCID: 0000-0002-0139-799X, Guibaud, Stéphane and Coeurdacier, Nicolas (2013) Credit constraints and growth in a global economy. . London School of Economics and Political Science, London, UK.

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Abstract

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)
Official URL:	http://www.lse.ac.uk/
Additional Information:	© 2013 The Authors
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	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
Date Deposited:	11 Nov 2013 15:05
Last Modified:	13 Sep 2024 20:25
URI:	http://eprints.lse.ac.uk/id/eprint/54261

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