Does the mere presence of big banks affect macroeconomic outcomes? In this paper, we develop a theory of granularity … (Gabaix, 2011) for the banking sector, introducing Bertrand competition and heterogeneous banks charging variable markups …. Using this framework, we show conditions under which idiosyncratic shocks to bank lending can generate aggregate …

granular effects: if markets are very concentrated in terms of the size distribution of banks, idiosyncratic shocks at the bank …We explore the impact of large banks and of financial openness for aggregate growth. Large banks matter because of … of itself, and it may also influence concentration in banking and thus the impact of bank-specific shocks for the …

granular effects: if markets are very concentrated in terms of the size distribution of banks, idiosyncratic shocks at the bank …We explore the impact of large banks and of financial openness for aggregate growth. Large banks matter because of … of itself, and it may also influence concentration in banking and thus the impact of bank-specific shocks for the …

granular effects: if markets are very concentrated in terms of the size distribution of banks, idiosyncratic shocks at the bank …We explore the impact of large banks and of financial openness for aggregate growth. Large banks matter because of … of itself, and it may also influence concentration in banking and thus the impact of bank-specific shocks for the …

right tail of the bank size distribution follows a power law. Also, the presence of big banks as measured by high market …Does the mere presence of big banks affect macroeconomic outcomes? Gabaix (2011) shows that idosyncratic shocks can … models of banking. Using a model with banks of heterogenous size who charge endogenous markups, we show under which …