Volatility and growth /
Aghion, Philippe,author.
Banerjee, Abhijit V.,author.
It has long been recognized that productivity growth and the business cycle are closely interrelated. Yet, until recently, the two phenomena have been investigated separately in the economics literature. This book provides the first consistent attempt to analyze the effects of macroeconomic volatility on productivity growth, and also the reverse causality from growth to business cycles. The authors show that by looking at the economy through the lens of private entrepreneurs, who invest under credit constraints, one can go some way towards explaining persistent macroeconomic volatility and the effects of volatility on growth. At the same time, they propose a new approach to analyze the impact of macroeconomic policies on long run growth and the design of stabilisation programs.
Includes bibliographical references (pages [130]-136) and index.
Modeling credit markets -- Volatility and growth : AK versus Schumpeterian approach -- Financial development and the effects of volatility on growth -- Endogeneizing volatility : pecuniary externalities and the credit channel -- Endogenous volatility in an open economy -- The third generation approach to currency crises.
It has long been recognized that productivity growth and the business cycle are closely interrelated. Yet, until recently, the two phenomena have been investigated separately in the economics literature. This book provides the first consistent attempt to analyze the effects of macroeconomic volatility on productivity growth, and also the reverse causality from growth to business cycles. The authors show that by looking at the economy through the lens of private entrepreneurs, who invest under credit constraints, one can go some way towards explaining persistent macroeconomic volatility and the effects of volatility on growth. At the same time, they propose a new approach to analyze the impact of macroeconomic policies on long run growth and the design of stabilisation programs.
Endogenous growth (Economics)
Economic development.
Macroeconomics.
Business cycles.
Credit.