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Credit constraints and growth in a global economy

Keyu Jin, Stéphane Guibaud and Nicolas Coeurdacier

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We show that in an open-economy OLG model, the interaction between growth differentials and household credit constraints, more severe in fast-growing countries, can explain three prominent global trends: a divergence in private saving rates between advanced and emerging economies, large net capital outflows from the latter, and a sustained decline in the world interest rate. Micro-level evidence on the evolution of age-saving profiles in the U.S. and China corroborates our mechanism. Quantitatively, our model explains about 40 percent of the divergence in aggregate saving rates, and a significant portion of the variations in age-saving profiles across countries and over time.

Keywords: Globalization; capital ows; credit constraints; current account; demographics; social security. (search for similar items in EconPapers)
JEL-codes: F21 F32 F41 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011-02-23
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http://eprints.lse.ac.uk/35706/ Open access version. (application/pdf)

Related works:
Journal Article: Credit Constraints and Growth in a Global Economy (2015) Downloads
Working Paper: Credit constraints and growth in a global economy (2015) Downloads
Working Paper: Credit Constraints and Growth in a Global Economy (2015) Downloads
Working Paper: Credit constraints and growth in a global economy (2013) Downloads
Working Paper: Credit Constraints and Growth in a Global Economy (2012) Downloads
Working Paper: Credit Constraints and Growth in a Global Economy (2012) Downloads
Working Paper: Credit Constraints and Growth in a Global Economy (2011) Downloads
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