Credit Constraints and Growth in a Global Economy
Nicolas Coeurdacier, Stéphane Guibaud, Keyu Jin
American Economic Review · 2015 · Volume 105 · Issue 9
Abstract
We show that in an open-economy OLG model, the interaction between growth differentials and household credit constraints—more severe in fast-growing countries—can explain three prominent global trends: a divergence in private saving rates between advanced and emerging economies, large net capital outflows from the latter, and a sustained decline in the world interest rate. Micro-level evidence on the evolution of age-saving profiles in the US and China corroborates our mechanism. Quantitatively, our model explains about a third of the divergence in aggregate saving rates, and a significant portion of the variations in age-saving profiles across countries and over time. (JEL E21, E22, F21, F32, F41, O16, P24)
Keywords
Macroeconomics: Consumption, Saving, Wealth, Investment, Capital, Intangible Capital, Capacity, International Investment, Long-term Capital Movements, Current Account Adjustment, Short-term Capital Movements, Open Economy Macroeconomics, Economic Development: Financial Markets, Saving and Capital Investment, Corporate Finance and Governance, Socialist Systems and Transitional Economies: National Income, Product, and Expenditure, Money, Inflation
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