ACCESS TO BANK LOANS, INCOME DISTRIBUTION AND ECONOMIC GROWTH IN AGENT BASED MODELING: EVIDENCE FROM EVOLUTIONARY PERSPECTIVE

This doctoral dissertation consists of three inter-related studies which constitute
its main text, with introductory and summary chapters. The three main studies
share a common feature in that they investigate the link between access to bank
loans, income distribution and productivity growth. The second chapter is a
theoretical framework that uses agent-based computational economics (ACE) to
detect the link between access to bank loans and functional income distribution.
The third chapter uses Ethiopian firm-level and national income data to validate
the second chapter. The fourth chapter investigates the effect of functional
income distribution on productivity growth from an evolutionary economic
perspective.
The second chapter (first study) focuses on Dosi et al.’s (2013) agent-based
model which assumes that a well-functioning banking system exists and that
industries are composed of both capital and non-capital goods’ producing
sectors. As such, monetary policy has a minimal role in impacting functional
income distribution leading to an active use of macroeconomic policy. Chapter 2
modifies this model to capture the realities of developing countries where the
banking system’s supply of services is smaller than what is considered optimal.
The system is heavily influenced by inside agents and industries are dominated
by non-capital goods’ producing firms.