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Quantity versus Price Bank Competition and Macroeconomic Performance given Bank Concentration

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  • Erotokritos Varelas

    (Department of Economics, University of Macedonia)

Abstract

This paper elaborates upon the following three theses: First, given bank sector concentration, the other aspect of this sector that matters for the overall economy is that of price vs. quantity competition by itself. Second, the macroeconomic performance of price competition is superior, enhancing the tax base and bank profit, capitalizing additionally the banks upon public debt induced instability, which the policymaker can minimize through Taylor rule. And, third, the ultimate link between banking competition and macroeconomic performance is the bank regulation shaping bank operation in accordance with the financial needs of fiscal policy.

Suggested Citation

  • Erotokritos Varelas, 2015. "Quantity versus Price Bank Competition and Macroeconomic Performance given Bank Concentration," Discussion Paper Series 2015_06, Department of Economics, University of Macedonia, revised Dec 2015.
    • Handle: RePEc:mcd:mcddps:2015_06
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    Cited by:

    1. Gerasimos T. SOLDATOS, 2017. "A formal look at the negative interbank rate," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(610), S), pages 261-266, Spring.
    2. Gerasimos T. SOLDATOS, 2017. "A formal look at the negative interbank rate," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(610), S), pages 261-266, Spring.
    3. Eleni Dalla, 2017. "Monetary policy implications on the investment decision: Do economies of scope in the banking sector matter?," Discussion Paper Series 2017_05, Department of Economics, University of Macedonia, revised Mar 2017.

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    More about this item

    Keywords

    Bank competition; Bank concentration; Public debt; Macroeconomic stability; Monetary policy.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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