Excessive Financing Costs in a Representative Agent Framework

• 成果类型: Article
• 署名作者: Eden, Maya
• 署名单位: The World Bank
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20140147
• 发表日期: 2016
• 页码: 215-237
• 关键词: Rent-seeking; intermediation; externalities; economies; liquidity; GROWTH; MODEL

摘要

This paper highlights a pecuniary externality that results in excessive financing costs. Firms borrow to finance purchases of an inelastically supplied input, bidding up its price. Since higher input prices necessitate more debt obligations, this leads to an increase in intermediation costs. A quantitative interpretation of the model suggests that it is optimal to tax financial intermediation by increasing the borrowing rate by 3 percentage points.