HOUSEHOLD INCOME DYNAMICS IN A LOWER-INCOME SMALL OPEN ECONOMY: A COMPARISON OF BANKING AND CROWDFUNDING REGIMES
Paul McNelis () and
Naoyuki Yoshino ()
The Singapore Economic Review (SER), 2018, vol. 63, issue 01, 147-166
This paper examines asset price and household income/consumption dynamics in a small open economy subject to terms of trade shocks, under two financial regimes. The first is a pure banking regime, in which firms borrow from banks for financing costs of labor, investment and intermediate goods for both the relatively riskless natural-resource traded sector and the non-traded sector. The second regime is more financially-inclusive banking/crowdfunding (BCF) regime, in which the households directly receive returns to capital from pooled lending to home-goods firms. Simulation results show that the banking regime better insulates the economy from negative shocks but limits the upside gain from positive shocks which would take place in the banking-crowdfunding regime.
Keywords: Crowd funding; DSGE models; boom-bust episode (search for similar items in EconPapers)
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