Banks As Coordinators of Economic Growth

Author/creator Ueda, Kenichi Author
Format Electronic
Publication InfoWashington : International Monetary Fund
Description22 p.
Supplemental ContentFull text available from Ebook Central - Academic Complete

Summary Annotation This paper formally identifies an important role of banks: Banks competitively internalize production externalities and facilitate economic growth. I formulate a canonical growth model with externalities as a game among consumers, firms, and banks. Banks compete for deposits to seek monopoly profits, including externalities. Using loan contracts that specify price and quantity, banks control firms' investments. Each bank forms a firm group endogenously and internalizes externalities directly within a firm group and indirectly across firm groups. This unique equilibrium requires a condition that separates competition for sources and uses of funds. I present a realistic institution that satisfies this condition.
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Technical detailsMode of access: World Wide Web
Genre/formElectronic books.
ISBN9781451909777
ISBN1451909772 (E-Book) Active Record
Stock number00013468

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