Income inequality, banking competition, and monetary policy.
Previous research has shown that inflation contributes to income inequality. However, in recent years, there have also been increasing concerns about the effects of concentration in the banking system on economic activity. Notably, we ask the fundamental questions: "How does the concentration of ass...
| Published in: | Southern Economic Journal Vol. 91; no. 3; pp. 1069 - 1107 |
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| Main Authors: | , |
| Format: | Article |
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Wiley-Blackwell
Jan2025
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=183867434&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 183867434 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00384038 SEJ jtl: Southern Economic Journal issn: 00384038 maglogo: N pubinfo: dt: Jan2025 vid: 91 iid: 3 pid: 480 pub: Wiley-Blackwell artinfo: ui: 183867434 10.1002/soej.12728 ppf: 1069 ppct: 38 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 4MB tig: atl: Income inequality, banking competition, and monetary policy. aug: au: Ghossoub, Edgar A. Reed, Robert R. affil: Department of Economics, Carlos Alvarez College of Business, University of Texas at San Antonio, Texas,, USA Department of Economics, Finance and Legal Studies, Culverhouse College of Business, University of Alabama, Tuscaloosa Alabama,, USA su: Income inequality Banking industry Price inflation Economic activity Financial institutions General equilibrium theory (Economics) Monetary policy sug: subj: Income inequality Banking industry Price inflation Economic activity Commercial Banking Personal and commercial banking industry Savings Institutions Other Depository Credit Intermediation Consumer Lending Financial institutions General equilibrium theory (Economics) Monetary policy keyword: banking competition banking concentration income inequality liquidity risk monetary policy banking competition banking concentration income inequality liquidity risk monetary policy ab: Previous research has shown that inflation contributes to income inequality. However, in recent years, there have also been increasing concerns about the effects of concentration in the banking system on economic activity. Notably, we ask the fundamental questions: "How does the concentration of assets in the banking system contribute to the concentration of income in society? Do the effects of inflation on inequality depend on the degree of banking concentration?" We develop a general equilibrium model with heterogeneous agents and microeconomic foundations for financial intermediaries to study the effects of concentration and monetary policy. The model predicts that concentrated banks contribute to inequality by holding large amounts of liquid assets in order to raise private—but not social—returns from capital investment. As concentrated banks distort the level of investment in the economy, the adverse effects of inflation on inequality are magnified in concentrated banking systems. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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