Abstract:ABSTRACT:
This paper donates to the works comparing the relative performance of financial intermediaries and markets by studying a situation between risk sharing and growth arises endogenously. Finan...ABSTRACT:
This paper donates to the works comparing the relative performance of financial intermediaries and markets by studying a situation between risk sharing and growth arises endogenously. Financial intermediaries provide insurance to households against a liquidity shock. In steadiness, the ability of intermediaries to share risk is forced by the market. Moreover, intermediaries invest less in the creative technology when they provide more risk-sharing. This creates a trade-off between risk-sharing and growth. We show the equilibrium of intermediaries and market that maximizes welfare depend on limit values.Read More
Publication Year: 2018
Publication Date: 2018-01-01
Language: en
Type: article
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