Credit Constraints and Growth in a Global Economy
American Economic Review
vol. 105,
no. 9, September 2015
(pp. 2838-81)
(Complimentary)
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 US and China corroborates our mechanism. Quantitatively, our model explains about a third of the divergence in aggregate saving rates, and a significant portion of the variations in age-saving profiles across countries and over time. (JEL E21, E22, F21, F32, F41, O16, P24)Citation
Coeurdacier, Nicolas, Stéphane Guibaud, and Keyu Jin. 2015. "Credit Constraints and Growth in a Global Economy." American Economic Review, 105 (9): 2838-81. DOI: 10.1257/aer.20130549Additional Materials
JEL Classification
- E21 Macroeconomics: Consumption; Saving; Wealth
- E22 Investment; Capital; Intangible Capital; Capacity
- F21 International Investment; Long-term Capital Movements
- F32 Current Account Adjustment; Short-term Capital Movements
- F41 Open Economy Macroeconomics
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- P24 Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation