Stability versus efficiency of the banking sector and economic growth
AbstractThe paper investigates, from the welfare and growth point of view, the existence of a trade-off between the stability and the efficiency of the banking system, studying the costs and benefits of regulatory programs. Welfare is considered in the context of an overlapping generation model with endogenous growth. There is horizontal differentiation and imperfect competition in the banking sector. Macroeconomic shocks affect the return on capital. We specify how deposit insurance may increase the number of deposits, welfare and growth. We characterize the conditions under which excess banking capacity may appear and how its reduction may improve welfare
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Bibliographic InfoPaper provided by CEPREMAP in its series CEPREMAP Working Papers (Couverture Orange) with number 9811.
Length: 21 pages
Date of creation: 1998
Date of revision:
Find related papers by JEL classification:
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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