Financial Intermediaries, Markets, and Growth
Copyright policy )Financial Intermediaries, Markets, and Growth
We build a model in which financial intermediaries provide insurance to households against idiosyncratic liquidity shocks. Households can invest in financial markets directly if they pay a cost. In equilibrium, the ability of intermediaries to share risk is constrained by the market. From a growth perspective, this can be beneficial because intermediaries invest less in the productive technology when they provide more risk‐sharing. Our model predicts that bank‐oriented economies can grow more slowly than more market‐oriented economies, which is consistent with some recent empirical evidence.
- Vanderbilt University United States
- Federal Reserve Bank of Philadelphia United States
- Frankfurt School of Finance & Management Germany
- Deutsche Bundesbank Germany
- Federal Reserve Bank of New York United States
Overlapping Generations, JEL Classification Number: E44, JEL Classification Number: G20, Financial Intermediaries,Risk Sharing,Finance and Growth,Comparing Financial Systems, Growth, Financial Intermediaries, Finanzintermediär, financial markets, G10, Finanzmarkt, Wirtschaftswachstum, JEL Classification Number: G10, ddc:330, Finance and Growth, Comparing Financial Systems, Financial markets, Investition, Financial intermediaries, Intermediation (Finance) ; Financial markets ; Risk, Allokation, E44, G20, Financial intermediaries, financial markets, risk-sharing, growth, Risk Sharing, risk-sharing, jel: jel:E44, jel: jel:G20, jel: jel:G10
Overlapping Generations, JEL Classification Number: E44, JEL Classification Number: G20, Financial Intermediaries,Risk Sharing,Finance and Growth,Comparing Financial Systems, Growth, Financial Intermediaries, Finanzintermediär, financial markets, G10, Finanzmarkt, Wirtschaftswachstum, JEL Classification Number: G10, ddc:330, Finance and Growth, Comparing Financial Systems, Financial markets, Investition, Financial intermediaries, Intermediation (Finance) ; Financial markets ; Risk, Allokation, E44, G20, Financial intermediaries, financial markets, risk-sharing, growth, Risk Sharing, risk-sharing, jel: jel:E44, jel: jel:G20, jel: jel:G10
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