دانلود رایگان مقاله انگلیسی تخصص ها، محدودیت های مالی و توزیع درآمد - الزویر 2018

Abstract

We investigate how financial frictions affect across- and within-country income distributions by using a three-country dynamic general equilibrium model. In our model, the first and second countries specialize in producing (country-specific) intermediate goods and face financial constraints. The third country produces the final goods by using its own labor and intermediate goods purchased from the first and second countries. The financial markets of these countries are perfectly separated from each other, and the interest rates differ across countries. Our finding is that if the elasticity of substitution between the two intermediate goods is sufficiently high, the relaxation of financial constraints in the first (second) country decreases the second (first) country’s income, whereas if the elasticity of substitution is sufficiently low, the relaxation of financial constraints in the first (second) country increases the second (first) country’s income. We also find that the income inequality across the three countries is widened by the further relaxation of financial constraints in the country with higher financial development, regardless of the ranking of the per capita income between the first and second countries. Furthermore, the income inequality within the first or second country is reduced as the financial constraints in that country are relaxed.

5 Concluding remarks

Nowadays, global value chains link the different stages of a production process that are located in different countries and promote international specializations. In this paper, we investigate how the final output is distributed across countries as income under international specializations.

We find from our model that the relaxation of financial constraints in the home country is harmful (beneficial) to the opponent country if the elasticity of substitution between the two intermediate goods is sufficiently high (low). We also find that the further relaxation of financial constraints in a country with the financial development than in the opponent country widens the income inequality across the three countries, regardless of the ranking of income between the first and second countries. Moreover, the income inequality within a country is reduced as the financial sector in that country is well developed. In particular, the income inequality within a country is independent of the financial constraints in the opponent country. This result crucially depends upon the fact that there is no international financial market in which agents in the first and second countries can lend and borrow with each other internationally. The extension to introduce an international financial market is left for future research.