Limited Enforcement, Financial Intermediation and Economic Development: A Quantitative Assessment∗
نویسندگان
چکیده
We present a model of economic development where the importance of financial differences caused by limited enforcement can be measured. Economies where enforcement is poor direct less capital to the production sector, and employ less efficient technologies. Calibrated simulations reveal that the resulting effect on output is large. Furthermore, the model correctly predicts that the average scale of production should rise with the quality of enforcement. Finally, we find that the importance of limited enforcement rises with the importance of capital in production.
منابع مشابه
Financial Intermediation and Economic Development: A Quantitative Assessment∗
We present a model in which the importance of financial intermediation for economic development can be measured. We generate financial differences by varying the degree to which contracts can be enforced. Economies where enforcement is poor direct less capital to the production sector, and employ less efficient technologies. Calibrated simulations reveal that the resulting effect on output is i...
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