Growth and financial frictions

Giulio Piccirilli ()
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Giulio Piccirilli: Universitas Mercatorum, via Appia Pignatelli 62, 00168 Roma. Universita` Cattolica, Istituto di Economia e Finanza, Via Necchi 5, 20123 Milano

Rivista Internazionale di Scienze Sociali, 2013, vol. 121, issue 2, 233-256

Abstract: 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 (search for similar items in EconPapers)
JEL-codes: O31 O38 O40 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:vep:journl:y:2013:v:121:i:2:p:233-256

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