Excessive Financial Intermediation in a Model with Endogenous Liquidity

Eden, Maya

World Bank, Washington, DC

关键词: AGGREGATE SUPPLY;    ALLOCATION OF CAPITAL;    ALLOCATION OF RESOURCES;    AMOUNT OF CAPITAL;    ARBITRAGE;   

DOI  :  10.1596/1813-9450-6059
RP-ID  :  WPS6059

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Does an unregulated financial system absorb too many productive inputs? This paper studies this question in the context of a dynamic model with heterogeneous producers. In the absence of a financial system, the only way to purchase inputs is using internal funds. Producers are subject to idiosyncratic productivity shocks, and will decide to produce only if their productivity is high enough. Otherwise, they will hold money. A financial intermediation technology allows producers to purchase inputs in excess of their internal funds, by borrowing from unproductive agents. However, intermediation requires the use of costly monitoring services. In equilibrium, intermediation increases the money in circulation and raises nominal prices, thereby reducing the value of internal funds and making producers increasingly reliant on costly monitoring services. For this reason, society is better off when intermediation is restricted.