https://macropaperwarehouse.com/authors/daria-finocchiaro/Daria FinocchiaroHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/a-traffic-jam-theory-of-growth/https://macropaperwarehouse.com/papers/a-traffic-jam-theory-of-growth/<p><strong>Research Question.</strong> Finocchiaro and Weil ask whether financial development necessarily promotes long-run economic growth, or whether congestion externalities in R&amp;D markets can offset — and even reverse — the growth benefits of easier credit access. The paper proposes that the empirical coexistence of expanding financial sectors and roughly constant per-capita GDP growth rates (approximately 2% annually in the United States over the last century) can be explained by the interplay of search frictions in two sequential markets: credit and innovation.</p>