Skip to main content
Article thumbnail
Location of Repository

Dynamic banking: a reconsideration

By Sudipto Bhattacharya and A. Jorge-Padilla

Abstract

Financially intermediated and stock market consumption-investment allocations, with and without governmental interventions, are compared in a welfare sense in overlapping generation economies with (and without) shocks to agents' intertemporal preferences. We first show that, in economies with preference shocks, governmental interventions subject to the same information requirements as those imposed on financial intermediaries, lead to stock market allocations that are not inferior to those attained under financial intermediation. Second, we argue that the necessary interventions are qualitatively no different from those required to implement stationary optimal allocations in OLG models without shocks to agents' intertemporal consumption preferences

Topics: HB Economic Theory, HG Finance
Publisher: Oxford University Press
Year: 1996
DOI identifier: 10.1093/rfs
OAI identifier: oai:eprints.lse.ac.uk:39750
Provided by: LSE Research Online
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://rfs.oxfordjournals.org/ (external link)
  • http://eprints.lse.ac.uk/39750... (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.