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Articles • Brazil. J. Polit. Econ. 41 (3) • 2021 • https://doi.org/10.1590/0101-31572021-3122   copy

Credit constraints and structure: a theoretical model of extractivism and slow-growth dynamics* * An earlier version of this paper was presented at the 45th Eastern Economists Association Conference, New York, 2019. We thank participants in this conference and the anonymous referees for helpful comments and suggestions. We also thank Peter Skott for his comments and contributions to this paper. He is a virtual coauthor. The usual disclaimers apply.

Restrições e estrutura de crédito: um modelo teórico de extrativismo e dinâmica de crescimento lento

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

We develop a theoretical model that explains the relationship between credit constraints and economic growth in the context of a three-sector economy, including an “extractive” sector. The model belongs in the structuralist tradition and it is inspired by the Colombian economy. In contrast to neoclassic development economics models, we prove that: 1) relaxing the credit crunch would foster formal sector growth but it may nevertheless not imply formal employment growth; and 2) the economy can converge to a pattern where the extractive sector increases while the formal one shrinks.

KEYWORDS:
Credit constraints; formal employment; extractivism; Colombia; structuralist economics

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E-mail: cecilia.heise@bjpe.org.br
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