Has the U.S. Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation
Thomas Philippon ()
No 9792, CEPR Discussion Papers from C.E.P.R. Discussion Papers
A quantitative investigation of financial intermediation in the U.S. over the past 130 years yields the following results : (i) the finance industry’s share of GDP is high in the 1920s, low in the 1950s and 1960s, and high again in the 1990s and 2000s; (ii) most of these variations can be explained by corresponding changes in the quantity of intermediated assets (equity, household and corporate debt, assets yielding liquidity services); (iii) intermediation is produced under constant returns to scale with an annual average cost comprised between 1.5% and 2% of outstanding assets; (iv) quality adjustments that take into account changes in the characteristics of firms and households are quantitatively important; and (v) the unit cost of intermediation has not decreased over the past 30 years.
Keywords: economic growth; informativeness; investment; price efficiency (search for similar items in EconPapers)
JEL-codes: E2 G2 N2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
Journal Article: Has the US Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation (2015)
Working Paper: Has the U.S. Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:9792
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=9792
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ..
Series data maintained by (). This e-mail address is bad, please contact .