Uninsured idiosyncratic production risk with borrowing constraints

被引:19
|
作者
Covas, Francisco [1 ]
机构
[1] Bank Canada, Monetary & Financial Anal Dept, Ottawa, ON K1A 0G9, Canada
来源
关键词
incomplete markets; precautionary saving; entrepreneurial investment; borrowing constraints; aggregate savings;
D O I
10.1016/j.jedc.2005.06.012
中图分类号
F [经济];
学科分类号
02 ;
摘要
This paper analyzes a general-equilibrium model of a heterogeneous agents economy in which the agents are subject to borrowing constraints and uninsurable idiosyncratic production risk. In particular, it addresses the impact of these frictions for aggregate capital accumulation. In contrast to other studies, the results suggest that, when entrepreneurs are poorly diversified, the underaccumulation of capital in the entrepreneurial sector of the model economy is less likely to hold, because of a strong precautionary savings motive. Furthermore, the effect of these frictions on entrepreneurial investment exacerbates the overaccumulation of capital in the non-entrepreneurial sector of the economy. (c) 2005 Elsevier B.V. All rights reserved.
引用
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页码:2167 / 2190
页数:24
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