Please use this identifier to cite or link to this item: http://hdl.handle.net/2445/174021
Title: Entrepreneurship, growth and productivity with bubbles
Author: Clain-Chamosset-Yvrard, Lise
Raurich, Xavier
Seegmuller, Thomas
Keywords: Emprenedoria
Creixement econòmic
Productivitat
Entrepreneurship
Economic development
Industrial productivity
Issue Date: 2021
Publisher: Universitat de Barcelona. Facultat d'Economia i Empresa
Series/Report no: [WP E-Eco21/407]
Abstract: Entrepreneurship, growth and total factor productivity are larger when there is a financial bubble. We explain these facts using a growth model with financial bubbles in which individuals face heterogeneous wages and returns on productive investment. The heterogeneity in the return of investment separates individuals between savers and entrepreneurs. Savers buy financial assets, which are deposits or a financial bubble. Entrepreneurs incur in a start-up cost and borrow to invest in productive capital. The bubble provides liquidities to credit-constrained entrepreneurs. These liquidities increase investment and entrepreneurship when the start-up cost is large enough, which explains that growth and entrepreneurship can be larger with bubbles. Finally, productivity can be larger when the bubble further increases the investment of more productive entrepreneurs. This can occur when the return of investment is correlated with wages.
It is part of: UB Economics – Working Papers, 2021, E21/407
URI: http://hdl.handle.net/2445/174021
Appears in Collections:UB Economics – Working Papers [ERE]

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