Endogenous Borrowing Constraints and Stagnation in Latin America

  title={Endogenous Borrowing Constraints and Stagnation in Latin America},
  author={Paulina Restrepo-Echavarria},
Latin America has had striking changes in economic performance over time. Following the recession and debt crises of the early 1980’s, per-capita consumption declined for about ten years and in the year 2004 it was not that different from what it was in 1980. This paper studies consumption stagnation in Latin America using a small open economy real business cycle model with endogenous borrowing limits, endogenous capital accumulation and domestic productivity and international interest rate… CONTINUE READING

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