A Theory of Growth, Financial Development and Trade.
This paper presents an analysis of the joint determination of real and financial development. Privately informed designers obtain external finance for their research projects through incentive-compatible loan contracts. Contracts are enforced through costly monitoring activity which lenders may either undertake themselves, or delegate to a financial intermediary. The analysis establishes a positive, two-way causal relationship between growth and financial development. In addition, using a multicountry version of the model, it is shown how both financial and trade liberalization can accelerate the development of intermediation; only trade liberalization has a direct positive effect on growth, however. Copyright 1998 by The London School of Economics and Political Science
Year of publication: |
1998
|
---|---|
Authors: | Blackburn, Keith ; Hung, Victor T Y |
Published in: |
Economica. - London School of Economics (LSE). - Vol. 65.1998, 257, p. 107-24
|
Publisher: |
London School of Economics (LSE) |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Distribution and Development in a Model of Misgovernance
Blackburn, Keith, (2005)
-
Financial Liberalisation, Bureaucratic Corruption and Economic
Blackburn, Keith, (2006)
-
Foreign aid: A fillip for development or a fuel for corruption?
Blackburn, Keith, (2011)
- More ...