Banks, liquidity crises and economic growth

Mostra el registre complet Registre parcial de l'ítem

• dc.contributor.author Gaytan, Alejandroca
• dc.contributor.author Rancière, Romainca
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2017-07-26T10:51:07Z
• dc.date.available 2017-07-26T10:51:07Z
• dc.date.issued 2001-08-01
• dc.date.modified 2017-07-23T02:09:29Z
• dc.description.abstract How do the liquidity functions of banks affect investment and growth at different stages of economic development? How do financial fragility and the costs of banking crises evolve with the level of wealth of countries? We analyze these issues using an overlapping generations growth model where agents, who experience idiosyncratic liquidity shocks, can invest in a liquid storage technology or in a partially illiquid Cobb Douglas technology. By pooling liquidity risk, banks play a growth enhancing role in reducing inefficient liquidation of long term projects, but they may face liquidity crises associated with severe output losses. We show that middle income economies may find optimal to be exposed to liquidity crises, while poor and rich economies have more incentives to develop a fully covered banking system. Therefore, middle income economies could experience banking crises in the process of their development and, as they get richer, they eventually converge to a financially safe long run steady state. Finally, the model replicates the empirical fact of higher costs of banking crises for middle income economies.
• dc.format.mimetype application/pdfca
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=853
• dc.identifier.uri http://hdl.handle.net/10230/643
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 853
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword olg growth models
• dc.subject.keyword liquidity
• dc.subject.keyword financial intermediation
• dc.subject.keyword financial fragility
• dc.subject.keyword banking crises
• dc.subject.keyword Macroeconomics and International Economics
• dc.title Banks, liquidity crises and economic growthca
• dc.type info:eu-repo/semantics/workingPaper