Banking Competition: Implications for Welfare and Monetary Policy

Edgar Ghossoub ()
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Edgar Ghossoub: UTSA

Working Papers from College of Business, University of Texas at San Antonio

Abstract: The objective of this manuscript is to study the importance of banking competition in the formulation of monetary policy. While the Friedman rule can be optimal in the presence of perfect competition, it is never the case when the banking system is not competitive. Furthermore, when market power in the banking system is highly distortionary, it is optimal to impose a higher tax on money when the banking system is not competitive.

Keywords: Banking Competition; Monetary Policy; Welfare Costs; Inflation (search for similar items in EconPapers)
JEL-codes: D42 E52 G21 O42 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2013-01-05
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Persistent link: https://EconPapers.repec.org/RePEc:tsa:wpaper:0182eco

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