Agency Costs in Dynamic Economic Models
Bibliographic Data
| ID | 9714788 |
|---|---|
| Authors | Costas Azariadis (0000-0002-4517-3402, UCLA), Shankha Chakraborty (0000-0002-6732-1621, UCLA) |
| Year | 1999 |
| Volume | 109 |
| Issue | 455 |
| Pages | 222-241 |
| Publication date | 1999-04-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/1468-0297.00430 |
| OpenAlex | W1975423476 |
| Language | EN |
| References cited | 5 |
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 infinitely divisible and private agency costs to be convex. If there are external economies to financial 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 hump‐shaped impulse response functions
Agency cost · Capital (architecture · Capital accumulation · Economics · Financial intermediary · Intermediation · Loan · Microeconomics · Monetary economics · Production (economics · Returns to scale · Stock (firearms · Economic Growth and Productivity · Economic theories and models · Economic Theory and Policy · Finance
| Highly cited | No |
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