We study a dynamic economy where credit is limited by insufficient collateral and, as a result, investment and output … are too low. In this environment, changes in investor sentiment or market expectations can give rise to credit bubbles …, that is, expansions in credit that are backed not by expectations of future profits (i.e. fundamental collateral), but …

saving rate; (ii) strengthen the effect of growth on saving; and (iii) increase the growth rate if productivity growth is … endogenous. These propositions are supported by cross-country regressions of saving and growth rates on indicators of liquidity … saving rates in the OECD countries and that the process of financial integration in the European Community may lead to a …

steady-state supply of saving at the world level. With endogenous technical progress, financial repression may increase …