Demetriades, Panicos O; Devereux, Michael P - In: International Journal of Finance & Economics 5 (2000) 4, pp. 285-96
This paper examines investment decisions in an economy with two financial markets: an official market, which is subject to rationing due to an interest rate ceiling, and an unrestricted market, with a higher interest rate. In this context, the long-run equilibrium aggregate capital stock is...