Banking, Credit Market Imperfection and Economic Growth - Economic Research Forum (ERF)

Banking, Credit Market Imperfection and Economic Growth

Mahmoud Sami Nabi and Taoufik Rajhi


Date:
September, 2010

NO.
540

Length:
24 pages

Publisher:
Economic Research Forum (ERF)

Topic:
G. Financial Economics

Abstract
We develop a new model that links capital market imperfection to banking emergence and economic growth. It is shown that the banking system emerges endogenously after a first stage of slow economic growth. Interestingly, economic growth increases after the emergence of banking but remains under its potential level. This is due to a credit rationing brake which decreases progressively as the economy develops. Another finding is that a reduction of credit market imperfection reduces the credit rationing stage.

Arabic Abstract:

طورنا نموذج جديد يربط بين الخلل الذي يحدث في سوق المال وظهورالنظام المصرفي والنمو الاقتصادي. وتبين الورقة أن النظام المصرفي يظهر ضمنيا بعد المرحلة الأولى من النمو الاقتصادي البطيء. ومن المثير للاهتمام ، تظهر النتائج أن زيادة النمو الاقتصادي تأتي بعد بزوغ النظام المصرفي لكن هذه الزيادة في النمو لا تزال تحت مستوى إمكاناتها. هذا ويرجع ذلك إلى تقنين الائتمان والذي يقل تدريجيا مع تطور الاقتصاد. كشف آخر للورقة هو أن الحد من النقص في سوق الائتمان يحد من مرحلة تقنين الائتمان.
Research Fellows

Mahmoud Sami Nabi

Professor of Economics, University of Carthage


Taoufik Rajhi


Project

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