<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>In this paper, we analyse the simplest possible three-dimensional model of endogenous growth to account for the relationship between financial intermediation and economic growth. In our setting, households maximize an interim utility function and firms maximize profit. Households can save money only through banks which offer firms investment loans. We show that under very general assumptions, investments realized by firms depend not only on savings accumulated by banks but also on financial intermediation technology <italic>ϕ</italic>(<italic>θ</italic>). Using mathematical methods of dynamical systems, we found stationary states of the system and study their stability.</p>
</abstract>

In this paper, we analyse the simplest possible three-dimensional model of endogenous growth to account for the relationship between financial intermediation and economic growth. In our setting, households maximize an interim utility function and firms maximize profit. Households can save money only through banks which offer firms investment loans. We show that under very general assumptions, investments realized by firms depend not only on savings accumulated by banks but also on financial intermediation technology ϕ(θ). Using mathematical methods of dynamical systems, we found stationary states of the system and study their stability.

Endogenous Growth Model With Financial Intermediation

Studia Humana

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Endogenous Growth Model With Financial Intermediation"}

In this paper, we analyse the simplest possible three-dimensional model of endogenous growth to account for the relationship between financial intermediation...

Endogenous Growth Model With Financial Intermediation

Published Online: Jul 15, 2021

Page range: 49 - 57

DOI: https://doi.org/10.2478/sh-2021-0012

Keywords
dynamic analysis, endogenous growth, financial multiple equilibria

© 2021 Dominika Byrska, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Endogenous Growth Model With Financial Intermediation

Published Online: Jul 15, 2021

Page range: 49 - 57

DOI: https://doi.org/10.2478/sh-2021-0012

Keywordsdynamic analysis, endogenous growth, financial multiple equilibria

© 2021 Dominika Byrska, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
dynamic analysis, endogenous growth, financial multiple equilibria