Working Paper No. 157 THE FINANCIAL LEVERAGE COEFFICIENT: Macroeconomic Implications of Government Involvement in Intermediation by
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Center for Research on Economic Development
The paper, motivated by the extent of government involvement in the financial sectors of many countries, presents a model of a link between financial intermediation and economic growth. The model conceptualises a financial leverage coefficient, a construct which is the outcome of aggravated moral hazard generated by a combination of government involvement in financial intermediation and the pre...
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