Can Financial Infrastructures Foster Economic Development?

Bruno Amable and Jean-Bernard Chatelain

Working papers from Banque de France

Abstract: In this paper, financial infrastructures increase the efficiency of the banking sector: they decrease the market power (due to horizontal differentiation) of the financial intermediaries, lower the cost of capital, increase the number of depositors and the amount of intermediated savings, factors which in turn increase the growth rate and may help countries to take off from a poverty trap. Taxation finances financial infrastructures and decreases the private productivity of capital. Growth and welfare maximising levels of financial infrastructures are computed.

Keywords: Endogenous growth; imperfect competition; financial infrastructures (search for similar items in EconPapers)
JEL-codes: E62 G21 O16 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2001
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Can financial infrastructures foster economic development? (2001)
Working Paper: Can financial infrastructures foster economic development? (2001)
Working Paper: Can financial infrastructures foster economic development? (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:80

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