Limited Market Participation, Financial Intermediaries,And Endogenous Growth

Hiroaki Ohno

Review of Economics & Finance, 2011, vol. 1, 53-62

Abstract: This paper analyzes the role of imperfect asset markets and financial intermediaries in determining the equilibrium growth rate of the capital stock by incorporating exogenous market participation constraints into an overlapping generation¡¯s economy. Economic growth and social welfare monotonically increase with the degree of market participation. Hence, economies with financial intermediaries have a stronger potential for a higher growth rate than economies with imperfect markets lacking such institutions.

Keywords: Limited market participation; Financial intermediaries; Endogenous growth model (search for similar items in EconPapers)
JEL-codes: E21 G20 O16 (search for similar items in EconPapers)
Date: 2011
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