Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/189270 
Authors: 
Year of Publication: 
1999
Series/Report no.: 
Queen's Economics Department Working Paper No. 979
Publisher: 
Queen's University, Department of Economics, Kingston (Ontario)
Abstract: 
We take up the hypothesis that risk premiums on equities are embodying the costs incurred by equity holders in monitoring the firms which they have invested in. This idea is a key ingredient in our construction of a two sector neoclassical model with widget producing firms and commercial banks. So-called user costs or interest rate spreads are key prices of commercial bank services in the model. Commercial banks produce deposit services (check-writing services or transactions services) and lending services to widget producers.
Subjects: 
Commercial Banking
Monitoring Activity
General Equilibrium
National Accounting
JEL: 
G21
P12
Document Type: 
Working Paper

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