Credit subsidiesbad idea or misuse?

Resumo

Using a heterogeneous agent model with incomplete markets and entrepreneurship, I show that development banks can generate significant and positive impacts in an economy if they target the infrastructure sector and are funded through low distortionary taxes. Calibrating the model for the Brazilian economy, I assess that a better credit policy by the Brazilian Development Bank (BNDES) can generate a welfare gain around 10%. However, with the current format, the subsidy policies in Brazil are, at best, useless to foster development, besides transferring welfare from the poor to the rich.

Ficha do documento

Tipo

Estudo

Ano

2018

Instituição

Escola de Economia de São Paulo

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso aberto

Identificador

oai:repositorio.fgv.br:10438/24627

Temas

EconomiaDesenvolvimento Econômico

Palavras-chave

Development banksFinancial frictionsEntrepreneurshipSubsidiesEconomiaBancos de desenvolvimentoBanco Nacional de Desenvolvimento Econômico e Social (Brasil)CréditosEmpreendedorismo