Entrepreneurs, moral hazard, and endogenous growth

Autor:	Lutz Weinert, J. Philipp Reiß
Rok vydání:	2005
Předmět:	Macroeconomics Economics and Econometrics Endogenous growth theory Inequality Limited liability Moral hazard media_common.quotation_subject Financial market Subsidy Monetary economics Capital market imperfections Economics Production (economics) media_common
Zdroj:	Journal of Macroeconomics. 27:69-86
ISSN:	0164-0704
DOI:	10.1016/j.jmacro.2003.10.001
Popis:	We analyze an endogenous growth model with agents differing in their endowments. Poor entrepreneurs with limited liability need to borrow in financial markets to participate in aggregate output production. We show that the first-best solution can either be achieved by decentralized financial contracting or by employing a project-specific subsidy policy. If additional capital market imperfections are introduced into the model, a negative link between inequality and growth emerges. Then, the impact of inequality on growth increases for a higher degree of frictions.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::fdd09395f939faad3deb3daab7145da5 https://doi.org/10.1016/j.jmacro.2003.10.001 Zobrazit plný text záznamu Full Text from ScienceDirect