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Explaining Economic Growth with Imperfect Credit Markets
Author:
Luis Carranzanull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 193
Language:
English
Publication Date:
01 Dec 2000
DOI:
https://doi.org/10.5089/9781451859805.001
ISBN:
9781451859805
ISSN:
1018-5941
Pages:
29
Keywords:
WP; economic growth; growth; credit; market imperfections; productivity shock; wealth dynamics; credit constraint; credit-constraint economy; demand function; economy experience; credit restriction; Income distribution; Self-employment; Income; Productivity
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The purpose of this paper is to explain the humped-shaped behavior of the growth rate. Within a dynamic general equilibrium framework, it is found that, in the early stages of development, the source of growth is the reallocation of resources from sectors low-productivity sectors to high-productivity sectors (“extensive growth”), resulting in increasing growth rates. In the middle and mature stages of development, the source of growth is the higher average productivity achieved by the competition among entrepreneurs (“intensive growth”). As a result, the growth rate could be increasing in the middle stage and then displays a decreasing pattern during the mature stage.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2000: Issue 193