TY  - JOUR
AU  - Matsuyama, Kiminori
TI  - Aggregate Implications of Credit Market Imperfections
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13209
PY  - 2007
Y2  - July 2007
DO  - 10.3386/w13209
UR  - http://www.nber.org/papers/w13209
L1  - http://www.nber.org/papers/w13209.pdf
N1  - Author contact info:
Kiminori Matsuyama
Department of Economics
Northwestern University
2211 Campus Drive
Evanston, IL 60208
Tel: 847/491-8490
E-Mail: k-matsuyama@northwestern.edu
M1  - published as Kiminori Matsuyama. "Aggregate Implications of Credit Market Imperfections," in Daron Acemoglu, Kenneth Rogoff and Michael Woodford, editors, "NBER Macroeconomics Annual 2007, Volume 22" University of Chicago Press (2008)

M3  - presented at "22nd  Annual Conference on Macroeconomics", March 30-31, 2007
AB  - Credit market imperfections provide the key to understanding many important issues in business cycles, growth and development, and international economics.  Recent progress in these areas, however, has left in its wake a bewildering array of individual models with seemingly conflicting results.  This paper offers a road map.  Using the same single model of credit market imperfections throughout, it brings together a diverse set of results within a unified framework.  In so doing, it aims to draw a coherent picture so that one is able to see some close connections between these results, thereby showing how a wide range of aggregate phenomena may be attributed to the common cause.  They include, among other things, endogenous investment-specific technical changes, development traps, leapfrogging, persistent recessions, recurring boom-and-bust cycles, reverse international capital flows, the rise and fall of inequality across nations, and the patterns of international trade.  The framework is also used to investigate some equilibrium and distributional impacts of improving the efficiency of credit markets.  One recurring finding is that the properties of equilibrium often respond non-monotonically to parameter changes, which suggests some cautions for studying aggregate implications of credit market imperfections within a narrow class or a particular family of models.
ER  -