Big Banks and Macroeconomic Outcomes: Theory and Cross-Country Evidence of Granularity

Franziska Bremus, Claudia Buch, Katheryn Russ and Monika Schnitzer ()

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: Does the mere presence of big banks affect macroeconomic outcomes? We develop a theory of granularity for the banking sector by modeling heterogeneous banks charging variable markups. Using data for a large set of countries, we show that the banking sector is indeed "granular," as the right tail of the bank size distribution follows a power law. We demonstrate empirically that the presence of big banks, measured by a high degree of market concentration, is associated with a positive and significant relationship between bank-level credit growth and aggregate growth of credit or GDP.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (22)

Published in Journal of Money Credit and Banking 8 50(2018): pp. 1785-1825

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Big Banks and Macroeconomic Outcomes: Theory and Cross‐Country Evidence of Granularity (2018)
Working Paper: Big Banks and Macroeconomic Outcomes: Theory and Cross-Country Evidence of Granularity (2013)
Working Paper: Big Banks and Macroeconomic Outcomes: Theory and Cross-Country Evidence of Granularity (2013)
Working Paper: Big Banks and Macroeconomic Outcomes: Theory and Cross-Country Evidence of Granularity (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:62873

Access Statistics for this paper

More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg ().