Munich Personal RePEc Archive

The Politics of Financial Development and Capital Accumulation

Matsuoka, Tarishi and Naito, Katsuyuki and Nishida, Keigo (2013): The Politics of Financial Development and Capital Accumulation.

[img]
Preview
PDF
MPRA_paper_50181.pdf

Download (239kB) | Preview

Abstract

This paper proposes a simple analytical model to examine conditions in which a government policy to improve imperfect credit markets is practiced through a democratic political process, and analyzes interactions between the politically implemented policy and economic development. Individuals who support the policy are those who can start new investments only after the implementation of it. High income inequality and the low level of capital make the policy hard to implement, which is likely to cause the economy to fall into a poverty trap.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.