Publication:
Excessive Financial Intermediation in a Model with Endogenous Liquidity

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dc.contributor.authorEden, Maya
dc.date.accessioned2012-06-29T22:16:34Z
dc.date.available2012-06-29T22:16:34Z
dc.date.issued2012-05
dc.description.abstractDoes 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.en
dc.identifierhttp://documents.worldbank.org/curated/en/2012/05/16255088/excessive-financial-intermediation-model-endogenous-liquidity
dc.identifier.doi10.1596/1813-9450-6059
dc.identifier.urihttps://hdl.handle.net/10986/9358
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 6059
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectAGGREGATE SUPPLY
dc.subjectALLOCATION OF CAPITAL
dc.subjectALLOCATION OF RESOURCES
dc.subjectAMOUNT OF CAPITAL
dc.subjectARBITRAGE
dc.subjectARBITRAGE OPPORTUNITY
dc.subjectASSET PRICE
dc.subjectBAILOUTS
dc.subjectBANKING INDUSTRY
dc.subjectBENCHMARK
dc.subjectBIDS
dc.subjectBINDING CONSTRAINT
dc.subjectBORROWING
dc.subjectBUDGET CONSTRAINT
dc.subjectCAPITAL ACCUMULATION
dc.subjectCAPITAL ALLOCATION
dc.subjectCAPITAL COSTS
dc.subjectCAPITAL MARKET
dc.subjectCAPITAL PURCHASE
dc.subjectCAPITAL PURCHASES
dc.subjectCAPITAL STOCK
dc.subjectCOLLATERAL
dc.subjectCOMMERCIAL BANKS
dc.subjectCONSUMERS
dc.subjectCONSUMPTION SMOOTHING
dc.subjectCOORDINATION FAILURE
dc.subjectCOUNTERFEIT MONEY
dc.subjectDEBT
dc.subjectDEMAND FOR CAPITAL
dc.subjectDEMAND FOR SAVINGS
dc.subjectDERIVATIVE
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDEVELOPMENT POLICY
dc.subjectDISTRIBUTIONAL IMPLICATIONS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC EFFICIENCY
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC THEORY
dc.subjectECONOMICS RESEARCH
dc.subjectEFFICIENT ALLOCATION
dc.subjectEMERGING MARKET
dc.subjectENDOWMENTS
dc.subjectENTREPRENEURS
dc.subjectEQUILIBRIUM
dc.subjectEQUILIBRIUM PRICES
dc.subjectEXPECTED RETURNS
dc.subjectEXTERNAL FUNDS
dc.subjectEXTERNALITIES
dc.subjectFEDERAL RESERVE
dc.subjectFEDERAL RESERVE BANK
dc.subjectFINANCIAL CRISES
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL EXPERTISE
dc.subjectFINANCIAL FRAGILITY
dc.subjectFINANCIAL INSTRUMENTS
dc.subjectFINANCIAL INTERMEDIATION
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL REGULATION
dc.subjectFINANCIAL SECTOR
dc.subjectFINANCIAL SERVICES
dc.subjectFINANCIAL SHOCK
dc.subjectFINANCIAL SYSTEM
dc.subjectFIXED COST
dc.subjectFULL EMPLOYMENT
dc.subjectGDP
dc.subjectGROWTH THEORY
dc.subjectHOLDING
dc.subjectHOLDINGS
dc.subjectHOUSEHOLD WEALTH
dc.subjectIMPLICIT SUBSIDY
dc.subjectINCOME
dc.subjectINCOME SHOCKS
dc.subjectINDUSTRIAL LOANS
dc.subjectINEFFICIENCY
dc.subjectINEQUALITY
dc.subjectINFLATION
dc.subjectINPUT PRICES
dc.subjectINSURANCE
dc.subjectINTERNAL FUNDS
dc.subjectINTERNATIONAL BANK
dc.subjectLENDER
dc.subjectLENDERS
dc.subjectLEVIES
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CONSTRAINT
dc.subjectLIQUIDITY CONSTRAINTS
dc.subjectLOAN
dc.subjectLOAN SIZE
dc.subjectLOANABLE FUNDS
dc.subjectM1
dc.subjectMACROECONOMIC MODELS
dc.subjectMACROECONOMICS
dc.subjectMARGINAL COST
dc.subjectMARGINAL COSTS
dc.subjectMARGINAL UTILITY
dc.subjectMARKET FAILURES
dc.subjectMARKET PRICE
dc.subjectMATHEMATICAL ECONOMICS
dc.subjectMAXIMUM AMOUNT
dc.subjectMICRO STRUCTURE
dc.subjectMONETARY EQUILIBRIUM
dc.subjectMONEY SUPPLIES
dc.subjectMONEY SUPPLY
dc.subjectMONITORING COST
dc.subjectMORAL HAZARD
dc.subjectMORAL HAZARD PROBLEM
dc.subjectOPTIMIZATION
dc.subjectPARTIAL EQUILIBRIUM ANALYSIS
dc.subjectPHYSICAL CAPITAL
dc.subjectPOLITICAL ECONOMY
dc.subjectPORTFOLIO
dc.subjectPRICE LEVEL
dc.subjectPRODUCTION INPUTS
dc.subjectPRODUCTION OUTPUT
dc.subjectPRODUCTIVE INVESTMENT
dc.subjectPRODUCTIVE RESOURCES
dc.subjectPRODUCTIVE USE
dc.subjectPRODUCTIVITY
dc.subjectPROFITABILITY
dc.subjectRATE OF RETURN
dc.subjectREAL INCOME
dc.subjectRESERVE
dc.subjectRESERVE RATIO
dc.subjectRESERVE REQUIREMENT
dc.subjectRESERVE REQUIREMENTS
dc.subjectRESERVES
dc.subjectRETURN
dc.subjectSALES REVENUES
dc.subjectSAVINGS
dc.subjectSELF-FINANCE
dc.subjectSELF-FINANCING
dc.subjectSOCIAL WELFARE
dc.subjectSTRUCTURAL CHANGE
dc.subjectTITHE
dc.subjectTRANSITION ECONOMIES
dc.subjectUSE OF DERIVATIVES
dc.subjectUTILITY FUNCTION
dc.subjectVALUE ADDED
dc.subjectVALUE OF MONEY
dc.subjectWEALTH
dc.titleExcessive Financial Intermediation in a Model with Endogenous Liquidityen
dspace.entity.typePublication
okr.crossref.titleExcessive Financial Intermediation in a Model with Endogenous Liquidity
okr.date.disclosure2012-05-01
okr.date.doiregistration2025-04-10T10:07:22.168900Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2012/05/16255088/excessive-financial-intermediation-model-endogenous-liquidity
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.identifier.doi10.1596/1813-9450-6059
okr.identifier.externaldocumentum000158349_20120504120057
okr.identifier.internaldocumentum16255088
okr.identifier.reportWPS6059
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/05/04/000158349_20120504120057/Rendered/PDF/WPS6059.pdfen
okr.sectorFinance :: General finance sector
okr.topicFiscal and Monetary Policy
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicEconomic Theory and Research
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicFinance and Financial Sector Development::Islamic Finance
okr.topicMacroeconomics and Economic Growth
okr.unitDevelopment Research Group (DECRG)
okr.unitDECRG: Macroeconomics & Growth (DECMG)
okr.volume1 of 1
relation.isAuthorOfPublication443bbe9e-2343-561b-b27e-2d13a7c3d318
relation.isAuthorOfPublication.latestForDiscovery443bbe9e-2343-561b-b27e-2d13a7c3d318
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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