Growth and financial frictions

Name: Growth and financial frictions
Brand: Vita e Pensiero
Price: 6.00 EUR
Availability: OnlineOnly

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Issue

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2013 - 2

Title

Growth and financial frictions

Author

Giulio Piccirilli

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

06-2014

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

We build an expanding variety endogenous growth model with search frictions in financial markets. We show that the rate of growth declines with the extent of frictions. We also show that, as frictions gain momentum, the rate of growth becomes more sensitive to exogenous variations in innovation incentives. Thus, the paper provides a rationale for the large growth differentials that characterise countries with inefficient financial markets.

Keywords: Endogenous growth, financial frictions, matching.