Financial structure and growth
Leonardo Gambacorta (),
Jing Yang () and
Kostas Tsatsaronis ()
BIS Quarterly Review, 2014
Up to a point, banks and markets both foster economic growth. Beyond that limit, expanded bank lending or market-based financing no longer adds to real growth. But when it comes to moderating business cycle fluctuations, banks and markets differ considerably in their effects. In normal downturns, healthy banks help to cushion the shock but, when recessions have coincided with financial crises, we find that the impact on GDP has been three times as severe for bank-oriented economies as it has for market-oriented ones.
JEL-codes: G10 G21 O16 O40 (search for similar items in EconPapers)
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