TY - JOUR
T1 - Interactions between Financial Constraints and Economic Growth
AU - Jerónimo, J.
AU - Azevedo, Assis
AU - Neves, P. C.
AU - Thompson, M.
N1 - Funding Information:
This research has been financed by Portuguese public funds through FCT - Fundação para a Ciência e a Tecnologia, I.P., in the framework of the projects UIDB/04105/2020, UIDB/03182/2020, UIDB/00013/2020 and UIDP/00013/2020.
Publisher Copyright:
© 2023 The Author(s)
PY - 2023/7
Y1 - 2023/7
N2 - The financial economy and the real economy are interconnected through various, complex, and evolving transmission mechanisms, whose literary coverage is far from comprehensive. In this context, we wish to contribute to the literature on the interactions between financial constraints and economic growth. We introduce financial dynamics in the R&D-based growth literature, by bringing Bernanke, Gertler and Gilchrist’s (1999) informational asymmetries into Romer’s (1990) growth model. With the developed framework, our main goal is to examine if and how such asymmetries impact economic growth. We find that the overall impact of this form of financial constraints on long-term growth is negative.
AB - The financial economy and the real economy are interconnected through various, complex, and evolving transmission mechanisms, whose literary coverage is far from comprehensive. In this context, we wish to contribute to the literature on the interactions between financial constraints and economic growth. We introduce financial dynamics in the R&D-based growth literature, by bringing Bernanke, Gertler and Gilchrist’s (1999) informational asymmetries into Romer’s (1990) growth model. With the developed framework, our main goal is to examine if and how such asymmetries impact economic growth. We find that the overall impact of this form of financial constraints on long-term growth is negative.
KW - Economic growth
KW - Financial constraints
UR - http://www.scopus.com/inward/record.url?scp=85159066645&partnerID=8YFLogxK
U2 - 10.1016/j.najef.2023.101943
DO - 10.1016/j.najef.2023.101943
M3 - Article
SN - 1062-9408
VL - 67
JO - North American Journal of Economics and Finance
JF - North American Journal of Economics and Finance
M1 - 101943
ER -