Why do financial systems differ? History matters
AbstractWe describe a dynamic model of financial intermediation in which fundamental characteristics of the economy imply a unique equilibrium path of bank and financial market lending. Yet we also show that economies whose fundamental characteristics have converged may continue to have very different financial structures. Because setting up financial markets is costly in our model, economies that emphasize financial market lending are more likely to continue doing so in the future, all else equal.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Dallas in its series Center for Latin America Working Papers with number 0304.
Date of creation: 2004
Date of revision:
Other versions of this item:
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
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