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Macroeconomic Evolution after a Production Shock: the Role for Financial Intermediation

Author

Listed:
  • Dmitri V. Vinogradov

    () (Universität Heidelberg, Alfred-Weber-Institut für Wirtschaftswissenschaften
    Universität Heidelberg, Alfred-Weber-Institut für Wirtschaftswissenschaften)

Abstract

Financial intermediaries may increase economic efficiency through intertemporal risk smoothing. However without an adequate regulation, intermediation may fail to do this. This paper studies the effects of a production shock in a closed economy and compares abilities of market-based and bank-based financial systems in processing the shock. Unregulated banking system may collapse in absence of a proper regulation. The paper studies several types of regulatory interventions, which may improve the performance of the banking system.

Suggested Citation

  • Dmitri V. Vinogradov, 2006. "Macroeconomic Evolution after a Production Shock: the Role for Financial Intermediation," Working Papers 0430, University of Heidelberg, Department of Economics, revised Aug 2006.
  • Handle: RePEc:awi:wpaper:0430
    as

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    File URL: http://www.uni-heidelberg.de/md/awi/forschung/dp430.pdf
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    Cited by:

    1. Mavrotas, George & Vinogradov, Dmitri, 2007. "Financial sector structure and financial crisis burden," Journal of Financial Stability, Elsevier, vol. 3(4), pages 295-323, December.

    More about this item

    Keywords

    Financial intermediation; overlapping generations; general equilibrium; intertemporal smoothing;

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E53 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Deposit Insurance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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