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Financial intermediation and employment

Author

Listed:
  • Manoj Pant

    (Jawaharlal Nehru University)

  • Prabal Roy Chowdhury

    (Indian Statistical Institute, New Delhi)

  • Gurbachan Singh

    (Jawaharlal Nehru University)

Abstract

This paper explores the relationship between financial intermediation and employment. We explain why some economies have low financial intermediation even when financial intermediation is safe. Moreover, we seek to explain why these economies tend to be poor and vulnerable, and also have large self-employment even when the latter has low productivity. We model safe but unsound banks and show that the effects of bad banking can be overcome only partially by corrective taxes. The model is extended to incorporate the illegal sector of the economy as well as the labor laws.

Suggested Citation

  • Manoj Pant & Prabal Roy Chowdhury & Gurbachan Singh, 2004. "Financial intermediation and employment," Discussion Papers 04-22, Indian Statistical Institute, Delhi.
    • Handle: RePEc:alo:isipdp:04-22
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Financial intermediation; self-employment; tax; labor laws;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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