Bremus, Franziska; Buch, Claudia M.; Russ, Katheryn Niles; … - 2013
(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 … sector for many countries is indeed granular, as the right tail of the bank size distribution follows a power law. We then …
