Credit Constraints, Political Instability, and Capital Accumulation |
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| Author:
| Herrala, Risto
Ariss, Rima Turk |
| ISBN: | 978-1-306-38370-7 |
| Publication Date: | Jan 2013 |
| Publisher: | International Monetary Fund
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| Book Format: | Ebook |
| List Price: | USD $9.00 |
Book Description:
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We investigate the complex interactions between credit constraints, political instability, and capital accumulation using a novel approach based on Kiyotaki and Moore’s (1997) theoretical framework. Drawing on a unique firm-level data set from Middle-East and North Africa (MENA), empirical findings point to a large and significant effect of credit conditions on capital accumulation and suggest that continued political unrest worsens credit constraints. The results support the...
More DescriptionWe investigate the complex interactions between credit constraints, political instability, and capital accumulation using a novel approach based on Kiyotaki and Moore’s (1997) theoretical framework. Drawing on a unique firm-level data set from Middle-East and North Africa (MENA), empirical findings point to a large and significant effect of credit conditions on capital accumulation and suggest that continued political unrest worsens credit constraints. The results support the view that financial development measured by a relaxing of financial constraints is key to macroeconomic development.