Savings, Growth and Capital Markets Imperfections: The Case of Borrowing Constraints

Jose De Gregorio

No 1993/031, IMF Working Papers from International Monetary Fund

Abstract: This paper studies the effects that borrowing constraints have on savings and growth and argues that, though they increase savings, their effect on growth is ambiguous. Empirical evidence on the extent of borrowing constraints as well as savings, investment, human capital accumulation and growth performance for industrialized countries is presented. A simple model to show the effects of borrowing constraints on savings is developed. Then the model is extended to analyze the effects of borrowing constraints on human capital accumulation and growth. It is shown that borrowing constraints increase savings, but reduce human capital accumulation.

Keywords: WP; capital market; physical capital; interest rate; savings rate; savings literature; savings data; growth from Modigliani; mortgage market; flat incomes profile; first period savings; rate of an economy; savings performance; generation saving; capital market imperfection; Human capital; Income; Capital accumulation; Consumption; Capital markets (search for similar items in EconPapers)
Pages: 34
Date: 1993-03-01
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=1047 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1993/031

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().