Financial System Performance and Economic Dynamics
Keywords:
firm, multiplier, credit cycle, financial system, growth, business cycle, inequality
Abstract
The firm is the driving force of the economy since the activities of the firms boost aggregate demand as well as aggregate supply but it is the performance of the financial system which facilitates or restricts the activities of the firms. Financial systems allocate resources from savers to investors and since these two groups have different liquidity-risk-return characteristics, financial institutions and financial markets have to issue securities and innovate to bridge the gap.
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Published
2020-10-15
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