Piazza, Roberto - In: Review of Economic Dynamics 17 (2014) 4, pp. 677-706
Periods of economic boom with rapid credit and GDP growth can be followed by sudden busts. In the presence of financial … markets imperfections, a simple modification of a neoclassical growth model can fully account for this behavior. I study a … growth model for a small open economy where decreasing marginal returns to capital appear after the country has reached a …