VINOGRADOV, DMITRI (2011) BANKS, CREDIBILITY AND MACROECONOMIC EVOLUTION AFTER A PRODUCTION SHOCK. The Manchester School, 79 (3). pp. 480-509. DOI https://doi.org/10.1111/j.1467-9957.2009.02166.x
VINOGRADOV, DMITRI (2011) BANKS, CREDIBILITY AND MACROECONOMIC EVOLUTION AFTER A PRODUCTION SHOCK. The Manchester School, 79 (3). pp. 480-509. DOI https://doi.org/10.1111/j.1467-9957.2009.02166.x
VINOGRADOV, DMITRI (2011) BANKS, CREDIBILITY AND MACROECONOMIC EVOLUTION AFTER A PRODUCTION SHOCK. The Manchester School, 79 (3). pp. 480-509. DOI https://doi.org/10.1111/j.1467-9957.2009.02166.x
Abstract
One of the important functions of financial intermediation is intertemporal risk smoothing. In this paper we study the effects of a production shock in a closed economy and compare the abilities of market-based and bank-based financial systems in processing the shock. The analysis of the shock propagation indicates that a competitive banking system may collapse in the absence of a proper regulation. Paradoxically, it is the credibility of banks that makes bank-based economies fragile. A necessary and sufficient condition for successful bailout schemes is proposed. © 2010 The Author. The Manchester School © 2010 Blackwell Publishing Ltd and The University of Manchester.
| Item Type: | Article |
|---|---|
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HG Finance |
| Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
| SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
| Depositing User: | Unnamed user with email elements@essex.ac.uk |
| Date Deposited: | 03 Nov 2011 16:24 |
| Last Modified: | 16 May 2024 16:51 |
| URI: | http://repository.essex.ac.uk/id/eprint/1256 |