Agency Costs In Dynamic Economic Models  

Oleh:

Azariadis, Costas ; Chakraborty, Shankha

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 109 no. 455 (Apr. 1999), page 222-241.
Topik: agency costs; dynamic Economic
Fulltext: 222.pdf (494.6KB)

Isi artikel

We consider an overlapping generations economy where capital is produced from bank loans under stochastic constant returns to scale, and subject to idiosyncratic shocks whose realisations are costly to verify. Our formulation differs from earlier work in permitting investment projects to be in®nitely divisible and private agency costs to be convex. If there are external economies to ®nancial intermediation, then deviations from steady-state output are negatively correlated with the spread between loan and deposit rates. Moreover, the capital stock correspondence is set-valued, a result consistent with poverty traps, growth cycles, and humpshaped impulse response functions.

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