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 |
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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: | 30 Oct 2024 20:10 |
URI: | http://repository.essex.ac.uk/id/eprint/1256 |