We construct an endogenous growth model in which bank runs occur with positive probability in equilibrium. In this setting, a bank run has a permanent effect on the levels of the capital stock and of output. In addition, the possibility of a run changes the portfolio choices of depositors and of...

In the present short paper author attempts to point out econometrically the importance of banking sector viability and household consumption as a requirement for economic growth. In the recent financial crisis many economies are facing the danger of financial collapse. The remedy is difficult,...

In the present short paper author attempts to point out econometrically the importance of banking sector viability as a requirement for economic growth. In the recent financial crisis many economies are facing the danger of financial collapse. The remedy is difficult, cold minded policy-makers...