Bank structure, capital accumulation and growth
Subtitle: a simple macroeconomic model
By: Mark G. Guzman.
Series: Research Department working paper ;; 9907; Working paper (Federal Reserve Bank of Dallas. Research Dept. : Online) ;; 9907.
Publisher: Federal Reserve Bank of Dallas
Published: 1999
Place of publication: [Dallas, Tx.]
Language: eng
Format: Electronic resource
Subjects: Banks and banking -- Econometric models.; Bank mergers -- Econometric models.
Description: "This paper analyzes the equilibrium growth paths of two economies that are identical in all respects, except for the organization of their financial systems: in particular, one has a competitive banking system and the other has a monopolistic banking system. In addition, the sources of inefficiencies, as a result of monopoly banking, and their relationship to the existence of credit rationing are explored. Monopoly in banking tends to depress the equilibrium law of motion for the capital stock for either of two reasons. When credit rationing exists, monopoly banks ration credit more heavily than competitive banks. When credit is not rationed, the existence of monopoly banking leads to excessive monitoring of credit financed investment. Both of these have adverse consequences for capital accumulation. In addition, monopoly banking is more likely to lead to credit rationing than is competitive banking. Finally, the scope for development trap phenomena to arise is considered under both a competitive and a monopolistic banking system"--Federal Reserve Bank of Dallas web site.
Notes: Also available in print.
Includes bibliographical references.
Revised March 2000, published Economic Theory, Vol 16, 2000, pp. 421-455.
Title from PDF file as viewed on 1/27/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.