American Economic Review Vol. 105 No. 9 2015

Credit Constraints and Growth in a Global Economy

Nicolas Coeurdacier¹; Stéphane Guibaud²; Keyu Jin³

¹ SciencesPo, 28 rue des Saints Pères, 75007 Paris, France, and CEPR (e-mail: ) · ² SciencesPo, 28 rue des Saints Pères, 75007 Paris, France (e-mail: ) · ³ London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom (e-mail: )

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.

DOI

10.1257/aer.20130549

Volume

105

Issue

9

Pages

2838-2881

Language

en

Sources

crossref openalex bibtex:phds-export.bib

Cite

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