Credit rationing, profit accumulation and economic growth

Jean-Bernard Chatelain (1) , Bruno Amable (1) , Kirsten Ralf (2)

1 CES - Centre d'économie de la Sorbonne
2 DELTA - Département et Laboratoire d'Economie Théorique et Appliquée

This paper studies how credit rationing affects endogenous growth when capital and debt are related to the firm´s internal net worth, taken as collateral. The accumulation of firm´s net worth determines the growth rate of capital and the growth rate of the economy. The relation between growth and interest rate is then negative without requiring convex adjustment costs on investment.

Mots clés: Endogenous growth; investment; credit rationing

Domaines: Economies et finances

Jean-Bernard Chatelain, Bruno Amable, Kirsten Ralf. Credit rationing, profit accumulation and economic growth. Economics Letters, 2004, 117 (4), pp.301-307. ⟨10.1016/j.econlet.2004.03.034⟩. ⟨halshs-00112521⟩