This paper presents an extension of Lucas' model of endogenous growth with human capital, showing some linkages with financial intermediation. The model offered in this paper does not imply a univocal relationship between the rates of inflation and economic growth, but it bears an explicit...

This paper studies the question of the economic scale of financial institutions. We show that banks actively smooth book equity by adjusting payouts to achieve a desired trajectory of book equity. The countercyclical nature of net payouts of financial institutions leads to procyclical book...