Transactions costs, technological choice, and endogenous growth
Article Abstract:
A study of the relationship between the cost of financial transactions and the choice of technology confirms the inverse relationship and also shows the effect of technical efficiency on the rate of economic growth. Generally, lower transactions or trading expenses lead to greater investment in illiquid capital, which is long-run in nature, and to a higher rate of return on savings. An example illustrates that liquidity of secondary capital markets can either increase or decrease the rate of economic growth.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1995
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Financial markets in development, and the development of financial markets
Article Abstract:
Two models with endogenous market formations analyze the relationship between markets and development. The first model analyzes the role played by financial markets in the allocation of funds to the highest valued use in the economic system. The second model focuses on the role played by markets in supporting specialization in economic activity. The analysis of the two models highlight the consequences of perfect competition in market formation.
Publication Name: Journal of Economic Dynamics & Control
Subject: Economics
ISSN: 0165-1889
Year: 1997
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Some consequences of credit rationing in an endogenous growth model
Article Abstract:
An endogenous growth model is analyzed. The model assumes that investment is financed through credit extension. Endogeneity is further enhanced by adverse selection problems which increases equilibrium credit rationing in loan markets. It is shown that a joint determination of credit rationing and real growth rate equilibrium levels is valid. In addition, a provision of government subsidies may decrease such growth.
Publication Name: Journal of Economic Dynamics & Control
Subject: Economics
ISSN: 0165-1889
Year: 1993
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