Has the US Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation

Thomas Philippon ()

American Economic Review, 2015, vol. 105, issue 4, 1408-38

Abstract: A quantitative investigation of financial intermediation in the United States over the past 130 years yields the following results: (i) the finance industry's share of gross domestic product (GDP) is high in the 1920s, low in the 1960s, and high again after 1980; (ii) most of these variations can be explained by corresponding changes in the quantity of intermediated assets (equity, household and corporate debt, liquidity); (iii) intermediation has constant returns to scale and an annual cost of 1.5-2 percent of intermediated assets; (iv) secular changes in the characteristics of firms and households are quantitatively important. (JEL D24, E44, G21, G32, N22)

JEL-codes: D24 E44 G21 G32 N22 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20120578
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Citations: View citations in EconPapers (197)

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Related works:
Working Paper: Has the U.S. Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation (2014)
Working Paper: Has the U.S. Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation (2012)
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