Financial Intermediation, Variability and the Development Process

Luis Carranza (luiscarranzau@gmail.com) and José E. Galdón-Sánchez (jose.galdon@unavarra.es)
Additional contact information
José E. Galdón-Sánchez: Public University of Navarra
Authors registered in the RePEc Author Service: Jose Enrique Galdon-Sanchez (jose.galdon@unavarra.es)

No 04/02, Faculty Working Papers from School of Economics and Business Administration, University of Navarra

Abstract: In this paper we build a model of financial intermediation that explains the GDP variability pattern of an economy during the development process. We find evidence that per capita output is more volatile in middle-income economies than in both low and high-income economies. We show that, if the model economy is in the early or in the mature stages of development, there is a unique equilibrium. However, in the middle stages of development, multi-ple equilibria arise. Moreover, we find that in economies with imperfect credit markets, per capita output volatility tends to be higher than in economies with perfect or non-existent credit markets.

JEL-codes: E00 O11 O16 O40 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2002-06-01
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Published, Journal of Development Economics, 2004, vol. 73 (1), pp. 27-54

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Related works:
Journal Article: Financial intermediation, variability and the development process (2004)
Working Paper: Financial Intermediation, Variability and the Development Process (2000)
Working Paper: Financial intermediation, variability and the development process (2000)
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