Oligopolistic competition in the banking market and economic growth

Kojun Hamada, Akihiko Kaneko, Mitsuyoshi Yanagihara

    Research output: Contribution to journalArticle

    Abstract

    We investigate how banks' degree of imperfect competition affects economic growth. This study explores an imperfect competition model in banking in an overlapping generations model with endogenous growth. We demonstrate the following results. First, an increase in the deposit interest rate increases the steady growth rate of the economy. Second, as competition among banks intensifies, the economic growth rate increases. Third, it is ambiguous as to whether a higher lending interest rate caused by an increase in productivity results in a higher economic growth rate. In our numerical exercises, we exemplify the possibility that an increase in the lending interest rate increases the growth rate.

    Original languageEnglish
    JournalEconomic Modelling
    DOIs
    Publication statusAccepted/In press - 2017

    Fingerprint

    Banking
    Economic growth
    Oligopolistic competition
    Interest rates
    Imperfect competition
    Lending
    Bank competition
    Overlapping generations model
    Endogenous growth
    Productivity
    Deposits
    Exercise

    Keywords

    • Bank competition
    • Cournot competition
    • Endogenous growth
    • Overlapping generations model

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Oligopolistic competition in the banking market and economic growth. / Hamada, Kojun; Kaneko, Akihiko; Yanagihara, Mitsuyoshi.

    In: Economic Modelling, 2017.

    Research output: Contribution to journalArticle

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