... NILOY BOSE AND RICHARD COTHREN : 425 generated funds. Evidence for this can be found in the w... more ... NILOY BOSE AND RICHARD COTHREN : 425 generated funds. Evidence for this can be found in the works of Patrick (1966), McKinnon (1973), Tybout (1983), Basu (1984), and others.2 Apart from govern-mentally imposed interest rate restrictions and direct credit programs ...
This paper presents a model which predicts a negative, non-linear relationship between the rate o... more This paper presents a model which predicts a negative, non-linear relationship between the rate of inflation and rate of output growth, as observed in many empirical studies. The model describes an economy in which credit market imperfections arise due to asymmetric information between lenders and borrowers. Within this environment, two types of lending regime are possible--a rationing regime, where high and low risk borrowers are separated by means of credit rationing, and a screening regime, where separation takes place through costly information acquisition. An increase in the inflation rate alters lenders' behaviour in such a way (by increasing the incidence of rationing or the level of costly screening, or by switching the lending regime from screening to rationing) that adverse growth effect of inflation is magnified. The analysis provides a basis for the empirical finding that growth effect of inflation may be strongest in some specific range of inflation. Copyright 2002, Oxford University Press.
Abstract This paper considers an endogenous growth model in which an informational asymmetry exis... more Abstract This paper considers an endogenous growth model in which an informational asymmetry exists between capital producing borrowers and lenders as to the borrower's ability to successfully operate an investment project. In contrast to previous models of this genre, the lender can induce self-selection either by rationing a fraction of borrowers, or by using a costly screening technology, or by a mix of the two. The equilibrium contract's form and the growth rate of output are mutually dependent and are jointly determined. The effect of the lower cost of screening on the growth rate of output has been considered. We show that a decline in the screening cost, paradoxically, may lower the growth rate of output. Only when a threshold level of sophistication is crossed will the benefit of an advanced financial sector become evident in a higher growth rate.
ABSTRACT This article follows the nonlinear Autoregressive Distributed Lag (ARDL) error-correctio... more ABSTRACT This article follows the nonlinear Autoregressive Distributed Lag (ARDL) error-correction methodology to explore nonlinearity in the relationship between the trade balances and the real exchange rates for China and its 21 partners. We find evidence for short-run asymmetric effects of exchange rate in cases of 18 partners, short-run adjustment asymmetry in cases of 11 partners, short-run cumulative asymmetry in cases of seven partners, and a significant long-run asymmetric effect cases of five partners. We find support for the “J-curve” that is only due to appreciation or depreciation of the Yuan in cases of five partners, including the U.S.
... NILOY BOSE AND RICHARD COTHREN : 425 generated funds. Evidence for this can be found in the w... more ... NILOY BOSE AND RICHARD COTHREN : 425 generated funds. Evidence for this can be found in the works of Patrick (1966), McKinnon (1973), Tybout (1983), Basu (1984), and others.2 Apart from govern-mentally imposed interest rate restrictions and direct credit programs ...
This paper presents a model which predicts a negative, non-linear relationship between the rate o... more This paper presents a model which predicts a negative, non-linear relationship between the rate of inflation and rate of output growth, as observed in many empirical studies. The model describes an economy in which credit market imperfections arise due to asymmetric information between lenders and borrowers. Within this environment, two types of lending regime are possible--a rationing regime, where high and low risk borrowers are separated by means of credit rationing, and a screening regime, where separation takes place through costly information acquisition. An increase in the inflation rate alters lenders' behaviour in such a way (by increasing the incidence of rationing or the level of costly screening, or by switching the lending regime from screening to rationing) that adverse growth effect of inflation is magnified. The analysis provides a basis for the empirical finding that growth effect of inflation may be strongest in some specific range of inflation. Copyright 2002, Oxford University Press.
Abstract This paper considers an endogenous growth model in which an informational asymmetry exis... more Abstract This paper considers an endogenous growth model in which an informational asymmetry exists between capital producing borrowers and lenders as to the borrower's ability to successfully operate an investment project. In contrast to previous models of this genre, the lender can induce self-selection either by rationing a fraction of borrowers, or by using a costly screening technology, or by a mix of the two. The equilibrium contract's form and the growth rate of output are mutually dependent and are jointly determined. The effect of the lower cost of screening on the growth rate of output has been considered. We show that a decline in the screening cost, paradoxically, may lower the growth rate of output. Only when a threshold level of sophistication is crossed will the benefit of an advanced financial sector become evident in a higher growth rate.
ABSTRACT This article follows the nonlinear Autoregressive Distributed Lag (ARDL) error-correctio... more ABSTRACT This article follows the nonlinear Autoregressive Distributed Lag (ARDL) error-correction methodology to explore nonlinearity in the relationship between the trade balances and the real exchange rates for China and its 21 partners. We find evidence for short-run asymmetric effects of exchange rate in cases of 18 partners, short-run adjustment asymmetry in cases of 11 partners, short-run cumulative asymmetry in cases of seven partners, and a significant long-run asymmetric effect cases of five partners. We find support for the “J-curve” that is only due to appreciation or depreciation of the Yuan in cases of five partners, including the U.S.
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