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Taking Banks to Solow

  • Hans Gersbach
  • Jean-Charles Rochet
  • Martin Scheffel
Part of the International Economic Association Series book series (IEA)

Abstract

The integration of financial intermediaries with own balance sheets into macroeconomic models is an important scientific endeavor. It promises not only new insights into the role of banks for economic activity, but it might also help identifying suitable regulation of the banking system and policies to deal with fluctuations or default in this system that could spill over to the other parts of the economy. Since the first attempts,1 the literature has advanced significantly and is briefly discussed below. In this paper we pursue a complementary route. We examine whether and how banks make a difference in standard macroeconomic models. In particular, the Solow and Ramsey (or Ramsey-Cass-Koopmans) models are starting points for the study of accumulation and growth processes in economics and have inspired a large branch of dynamic macroeconomic models. In the sequel, we study how these models can be combined with banks and their role in the intermediation of funds.

Keywords

Interest Rate Monetary Policy Total Factor Productivity Saving Rate Household Wealth 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Hans Gersbach, Jean-Charles Rochet and Martin Scheffel 2016

Authors and Affiliations

  • Hans Gersbach
    • 1
  • Jean-Charles Rochet
    • 2
  • Martin Scheffel
    • 3
  1. 1.CER-ETH—Center of Economic Research at ETH Zurich and CEPRSwitzerland
  2. 2.SFI and Institute of Banking and FinanceUniversity of ZurichSwitzerland
  3. 3.CMR—Center for Macroeconomic ResearchUniversity of CologneGermany

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