This article investigates a two-period lived OLG model with financial intermediation as a vehicle to share risk. Risk-averse agents subject to idiosyncratic income shocks prefer financial intermediation that implements the efficient allocation to capital markets. It is shown that the resulting...

This paper examines how the degree of interbank competition affects real economic growth, growth patterns, and consumer welfare using a dynamical systems approach. Risk averse agents insure against idiosyncratic risk via deposit contracts that maximize bank profits. These contracts are derived...

This paper explores how market power of agents on the capital market affects economic growth and output fluctuations in an overlapping-generations model with endogenous capital accumulation. Agents interact strategically by anticipating how their savings affect the return on savings in...