Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:134:\"Declaration of views_handler_filter::options_validate() should be compatible with views_handler::options_validate($form, &$form_state)\";s:5:\"%file\";s:109:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:589;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_handler_filter::options_submit() should be compatible with views_handler::options_submit($form, &$form_state)\";s:5:\"%file\";s:109:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:589;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:151:\"Declaration of views_handler_filter_term_node_tid::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state)\";s:5:\"%file\";s:131:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/modules/taxonomy/views_handler_filter_term_node_tid.inc\";s:5:\"%line\";i:303;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:154:\"Declaration of views_handler_filter_boolean_operator::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state)\";s:5:\"%file\";s:126:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/handlers/views_handler_filter_boolean_operator.inc\";s:5:\"%line\";i:149;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:148:\"Declaration of views_handler_filter_node_status::operator_form() should be compatible with views_handler_filter::operator_form(&$form, &$form_state)\";s:5:\"%file\";s:125:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/modules/node/views_handler_filter_node_status.inc\";s:5:\"%line\";i:14;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_plugin_row::options_validate() should be compatible with views_plugin::options_validate(&$form, &$form_state)\";s:5:\"%file\";s:104:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/plugins/views_plugin_row.inc\";s:5:\"%line\";i:135;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:126:\"Declaration of views_plugin_row::options_submit() should be compatible with views_plugin::options_submit(&$form, &$form_state)\";s:5:\"%file\";s:104:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/plugins/views_plugin_row.inc\";s:5:\"%line\";i:135;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128

Warning: Duplicate entry '128317791' for key 'PRIMARY' query: INSERT INTO cfsp_watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:88:\"/nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/sites/all/modules/views/views.module\";s:5:\"%line\";i:879;}', 3, '', 'https://rucdjfa.cfsp.org/publications/working-papers/economic-development-and-equilibrium-interaction-financial-frictions', '', '54.36.148.57', 1604630218) in /nfs/c06/h02/mnt/96679/domains/phase2.cfsp.org/html/includes/database.mysql.inc on line 128
Economic Development and the Equilibrium Interaction of Financial Frictions | CFSP | Consortium on Financial Systems and Poverty

Economic Development and the Equilibrium Interaction of Financial Frictions

Benjamin Moll
Robert M. Townsend
and Victor Zhorin
Publication Type: 
Working Papers
Publication Year: 
2013
Motivated by evidence from the micro data that the type of financial frictions faced by individuals varies across regions within countries, we develop a general equilibrium framework with heterogeneous producers that encompasses different micro financial underpinnings. We study the macroeconomic implications of a moral hazard problem due to unobserved effort and contrast them with those of limited commitment, the friction studied in most of the existing literature. The effects of moral hazard on macroeconomic aggregates – in particular aggregate productivity and the equilibrium interest rate – differ dramatically from those of limited commitment, and also from partial equilibrium effects of moral hazard. We then study an economy with different frictions in different regions or sectors. The combined effect of moral hazard and limited commitment is more than just a linear combination of their individual effects, and furthermore gives rise to interregional capital and labor flows that resemble rural-urban patterns observed in the data. Our overall conclusion is that different financial frictions not only have different macroeconomic effects but also interact in unexpected ways.
Region: 
Global
Country: 
Global
Topic: 
Economic Modeling
Topic: 
Flow of Funds
Topic: 
Financial Institutions
Topic: 
Occupational Choice