Credit Constraints and Growth in a Global Economy | Zendy

Nicolas Coeurdacier | Zendy; Stéphane Guibaud | Zendy; Keyu Jin | Zendy

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Credit Constraints and Growth in a Global Economy

Author(s) -

Nicolas Coeurdacier,

Stéphane Guibaud,

Keyu Jin

Publication year - 2015

Publication title -

american economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.936

H-Index - 297

eISSN - 1944-7981

pISSN - 0002-8282

DOI - 10.1257/aer.20130549

Subject(s) - economics , overlapping generations model , divergence (linguistics) , china , capital (architecture) , growth model , interest rate , private consumption , world economy , monetary economics , emerging markets , macroeconomics , geography , linguistics , philosophy , archaeology , fiscal policy , political science , law

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

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