A Two-Sector Growth Model with Credit Market Imperfections and Production Externalities

  • Takuma Kunieda
  • Kazuo Nishimura
Part of the Advances in Mathematical Economics book series (MATHECON, volume 22)


A two-sector dynamic general equilibrium model with financial constraints and production externalities is studied. Agents face idiosyncratic productivity shocks in each period. Agents who draw high productivity borrow resources in the financial market and become capital producers, whereas agents who draw low productivity become lenders. We analyze how the interaction between the extent of financial constraints and sector-specific production externalities affects the characterization of equilibria in a two-sector economy.


Two production sectors Financial constraints Production externalities Indeterminacy 



The authors would like to express thanks to Toru Maruyama, who is an editor, for his comments. All remaining errors, if any, are ours. This work is financially supported by the Japan Society for the Promotion of Science, Grants-in-Aid for Scientific Research (Nos. 15H05729, 16H02026, 16H03598, 16K03685).


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Copyright information

© Springer Nature Singapore Pte Ltd. 2018

Authors and Affiliations

  • Takuma Kunieda
    • 1
  • Kazuo Nishimura
    • 2
    • 3
  1. 1.School of EconomicsKwansei Gakuin UniversityNishinomiyaJapan
  2. 2.Research Institute of Economy, Trade and IndustryTokyoJapan
  3. 3.Research Institute for Economics and Business AdministrationKobe UniversityKobeJapan

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