Stability of Distribution of Relative Sizes of Banks as an Argument for the Use of the Representative Agent Concept

Dmitry Malakhov, Nikolay Pilnik and Igor Pospelov ()
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Igor Pospelov: National Research University Higher School of Economics

HSE Working papers from National Research University Higher School of Economics

Abstract: We propose a new theoretical model of the large-scale banking system of an open economy. It is shown that distribution of relative sizes of individual banks is stable over time and does not depend on the volume of deposits. Our findings provide an additional argument in favor of use of the representative agent concept in banking sector modeling. Empirical testing shows that using generalized versions of Pareto and Normal distribution, distributions of relative sizes can be approximated with high accuracy and, moreover, distributions are stable over time. Moreover, banks move wothin this distribution, thus distribution of the general population of banks is stable over time

Keywords: size distribution of banks; representative agent; general equilibrium (search for similar items in EconPapers)
JEL-codes: E10 G21 L11 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2015
New Economics Papers: this item is included in nep-mac
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Published in WP BRP Series: Economics / EC, December 2015, pages 1-54

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:116/ec/2015

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