@techreport{Fecht2005Financial,
abstract = {We build a model in which financial intermediaries provide insurance to households against a liquidity shock. Households can also invest directly on a financial market if they pay a cost. In equilibrium, the ability of intermediaries to share risk is constrained by the market. This can be beneficial because intermediaries invest less in the productive technology
when they provide more risk-sharing. Our model predicts that bank-oriented
economies should grow slower than more market-oriented economies, which is consistent with some recent empirical evidence. We show that the mix of intermediaries and market that maximizes welfare under a given level of financial development depends on economic fundamentals. We also show the optimal mix of two structurally very similar economies can be very different.},
author = {Falko Fecht and Kevin Huang and Antoine Martin},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {E44; G20; G10; 330; Financial Intermediaries; Risk Sharing; Finance and Growth; Comparing Financial Systems; Finanzintermedi\"{a}r; Finanzmarkt; Investition; Allokation; Wirtschaftswachstum; Overlapping Generations},
language = {eng},
number = {2005,03},
title = {Financial intermediaries, markets and growth},
type = {Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank},
url = {http://hdl.handle.net/10419/19511},
year = {2005}
}
