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. JEL Classification: L16, G10, G20, N20
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2005 Meeting Papers with number 275.
Date of creation: 2005
Date of revision:
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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Other versions of this item:
- Cyril Monnet & Erwan Quintin, 2004. "Why do financial systems differ? History matters," Center for Latin America Working Papers 0304, Federal Reserve Bank of Dallas.
- Monnet, Cyril & Quintin, Erwan, 2005. "Why do financial systems differ? History matters," Working Paper Series 0442, European Central Bank.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-01 (All new papers)
- NEP-DGE-2005-12-01 (Dynamic General Equilibrium)
- NEP-FMK-2005-12-01 (Financial Markets)
- NEP-SEA-2005-12-01 (South East Asia)
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