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Convergence, Financial Developmentand Policy Analysis


Convergence, Financial Developmentand Policy Analysis

Time: 8:30am-10:00am, Dec. 18th, 2018

Venue: Zhifuxuan Classroom, Langrun Garden, Peking University

Speaker:  Jianjun Miao

 (Department of Economics, Boston University)




We study the relationship among inflation, economic growth, and financial development in a Schumpeterian overlapping-generations model with credit constraints. In the baseline case money is super-neutral. When the financial development exceeds some critical level, the economy catches up and then converges to the growth rate of the world technology frontier. Otherwise, the economy converges to a poverty trap with a growth rate lower than the frontier and with inflation decreasing with the level of financial development. We then study efficient allocation and identify the sources of inefficiency in a market equilibrium. We show that a particular combination of monetary and fiscal policies can make a market equilibrium attain the efficient allocation.



Economic Growth, Innovation, Credit Constraints, Convergence, Policy Analysis, Money, Inflation


Jianjun Miao is Professor of Economics at Boston University, and an Associate Editor of Annals of Economics and Finance, Economic Theory, Journal of Mathematical Economics, and Macroeconomic Dynamics. Professor Miao’s research fields are macroeconomics and finance and their inter face with decision theory, public finance, and industrial organization. His main research areas are the macroeconomic implications of bubbles and crashes, theory and applications of decision making under uncertainty, macroeconomics with financial and real frictions, dynamic contracts, and continuous-time finance. He publishes extensively in top economics and finance journals including American Economic Review, Econometrica,Journal of Finance, American Economic Journal: Macroeconomics, International Economic Review, Journal of Economic Theory, Journal of Financial Economics,Journal of Monetary Economics, Review of Financial Studies, and Theoretical Economics. He obtained his Ph.D. in Economics from the University of Rochester in 2003.