Financial deepening

Nobuhiro Kiyotaki, John Moore

Research output: Contribution to journalArticle

21 Scopus citations

Abstract

We develop a model of financial deepening, based on the distinction between limited bilateral commitment and limited multilateral commitment. We explore the effects of secular changes in financial depth on investment and output; on intermediation and interest rates; on the long-run velocities of circulation of different monetary instruments, and the use of outside money; on the patterns of saving and trade in paper. Three stages of financial development are identified.

Original languageEnglish (US)
Pages (from-to)701-713
Number of pages13
JournalJournal of the European Economic Association
Volume3
Issue number2-3
DOIs
StatePublished - 2005
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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