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Costly financial intermediation in neoclassical growth theory

Rajnish Mehra, Facundo Piguillem and Edward C. Prescott

The neoclassical growth model is extended to include costly intermediated borrowing and lending between households. This is an important extension as substantial resources are used in intermediating the large amount of borrowing and lending between households. In 2007, in the United States, the amou... Full description

Year of Publication: 2011
Authors: Mehra, Rajnish; Piguillem, Facundo; Prescott, Edward C.
Publisher: Minneapolis, Minn. : Federal Reserve Bank of Minneapolis, Research Dep.
Physical Description: Online-Ressource (PDF-Datei: 59 S., 3,47 MB)
graph. Darst.
Series: Working paper / Federal Reserve Bank of Minneapolis, Research Dept ; 685
Language: English
Subjects: Neoklassik | Neoclassical economics | Wachstumstheorie | Growth theory | Private Verschuldung | Private debt | Finanzintermediation | Financial intermediation | Vermittlungstätigkeit | Intermediation
Genres: Arbeitspapier
Working Paper
Graue Literatur
Non-commercial literature
Type of Publication: Book / Working Paper
Notes: Systemvoraussetzungen: Acrobat Reader
Title record from database: ECONIS - Online Catalogue of the ZBW
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Summary: The neoclassical growth model is extended to include costly intermediated borrowing and lending between households. This is an important extension as substantial resources are used in intermediating the large amount of borrowing and lending between households. In 2007, in the United States, the amount intermediated was 1.7 times GNP, and the resources used in this intermediation amounted to at least 3.4 percent of GNP. The theory implies that financial intermediation services are an intermediate good and that the spread between borrowing and lending rates measures the efficiency of the financial sector.
Item Description: Systemvoraussetzungen: Acrobat Reader
Physical Description: Online-Ressource (PDF-Datei: 59 S., 3,47 MB)
graph. Darst.

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