Credit Expansion, Land Speculation, and Low-Interest-Rate Policy
Fuente:
arXiv
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| Autores principales: | , |
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| Formato: | Preprint |
| Publicado: |
2025
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| _version_ | 1866911457561542656 |
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| author | Hirano, Tomohiro Stiglitz, Joseph E. |
| author_facet | Hirano, Tomohiro Stiglitz, Joseph E. |
| contents | This paper analyses the impact of credit expansions arising from decreases in collateral requirements or more expansionary monetary policies on long-term productivity in a model with endogenous growth. Credit expansions associated with relaxation of land collateral financing (capital collateral financing) will be productivity-and growth-retarding (enhancing). Without appropriate financial regulation, expansionary monetary policy may so encourage land speculation using leverage that productive capital investment is decreased; there is a temporary asset boom, but slower economic growth. The generation that experienced the asset price boom is better off, but subsequent generations are worse off because of low growth. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2503_23552 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Credit Expansion, Land Speculation, and Low-Interest-Rate Policy Hirano, Tomohiro Stiglitz, Joseph E. Theoretical Economics This paper analyses the impact of credit expansions arising from decreases in collateral requirements or more expansionary monetary policies on long-term productivity in a model with endogenous growth. Credit expansions associated with relaxation of land collateral financing (capital collateral financing) will be productivity-and growth-retarding (enhancing). Without appropriate financial regulation, expansionary monetary policy may so encourage land speculation using leverage that productive capital investment is decreased; there is a temporary asset boom, but slower economic growth. The generation that experienced the asset price boom is better off, but subsequent generations are worse off because of low growth. |
| title | Credit Expansion, Land Speculation, and Low-Interest-Rate Policy |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2503.23552 |