A Growth Cycles Interaction with Imperfect Credit Market

Muriel Dal-Pont Legrand ()
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Muriel Dal-Pont Legrand: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique
Authors registered in the RePEc Author Service: Muriel DAL PONT LEGRAND

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Abstract: Within the Endogenous Growth paradigm, this paper studies the relationship between cycles and growth. The paper questions the positive influence that recessions may have on growth. Instead of paying attention to the innovation – market structure relationship, it focuses on the innovation – financial markets imperfections relationship. A model is developed where all investment is financed via credit extension characterised by credit rationing due to the asymmetric information hypothesis. In that context, we show that monetary policy is not neutral anymore and that finance may boost growth in smoothing intertemporal fluctuations through the credit channel.

Keywords: cycles; growth; money and credit.; money and credit (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

Published in Edited by C. Hausen, M. Resinek, N. Schürmann and M. Stierle. Determinants of Growth and Business Cycles: Theory, Empirical Evidences and Policy Implications, INFER Research Edition, 2004

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00484086

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