000			02842cam a22003497 4500
001			w10073
003			NBER
005			20211020112908.0
006			m o d
007			cr cnu||||||||
008			210910s2003 mau fo 000 0 eng d
100	1		_aRanciere, Romaine.
245	1	0	_aCrises and Growth: _bA Re-Evaluation / _cRomaine Ranciere, Aaron Tornell, Frank Westermann.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2003.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w10073
500			_aNovember 2003.
520	3		_aWe address the question of whether growth and welfare can be higher in crisis prone economies. First, we show that there is a robust empirical link between per-capita GDP growth and negative skewness of credit growth across countries with active financial markets. That is, countries that have experienced occasional crises have grown on average faster than countries with smooth credit conditions. We then present a two-sector endogenous growth model in which financial crises can occur, and analyze the relationship between financial fragility and growth. The underlying credit market imperfections generate borrowing constraints, bottlenecks and low growth. We show that under certain conditions endogenous real exchange rate risk arises and firms find it optimal to take on credit risk in the form of currency mismatch. Along such a risky path average growth is higher, but self-fulfilling crises occur occasionally. Furthermore, we establish conditions under which the adoption of credit risk is welfare improving and brings the allocation nearer to the Pareto optimal level. The design of the model is motivated by several features of recent crises: credit risk in the form of foreign currency denominated debt; costly crises that generate firesales and widespread bankruptcies; and asymmetric sectorial responses, where the nontradables sector falls more than the tradables sector in the wake of crises.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aF34 - International Lending and Debt Problems _2Journal of Economic Literature class.
690		7	_aF36 - Financial Aspects of Economic Integration _2Journal of Economic Literature class.
700	1		_aTornell, Aaron.
700	1		_aWestermann, Frank.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w10073.
856	4	0	_uhttps://www.nber.org/papers/w10073
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w10073
942			_2ddc _cW-PAPER
999			_c338098 _d296660