Chiarella, Carl; Flaschel, Peter; Hartmann, Florian; … - In: Journal of Economic Behavior & Organization 83 (2012) 3, pp. 410-423
In this paper we study the implications of the present broad banking system for macroeconomic stability. We show that when commercial banks are allowed to trade in financial assets (here equities) as a substitute for traditional lending, the macroeconomic system is likely to be an unstable one....