Abstract
This paper addresses the issue of impacts of the banking market structure on debt dynamics. Using a simple theoretical model, we analytically find a positive link between number of banks and growth rate of debt. By applying panel data analysis on a set of Eurozone countries, sufficient evidence for this positive relationship is provided. In case of Portugal, Italy, Greece, Spain (PIGS countries) the effects are more pronounced. More specifically, the dominant effects on debt were the GDP growth rate, the primary balance over debt ratio and the number of banks. Therefore, bank regulation should pay attention on theses linkages, implying significant benefits for debt stability.
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Artikel in diesem Heft
- Frontmatter
- Labor Demand and Unequal Payments: Does Wage Dispersion Matter? Using German Employer-Employee Data to Analyze the Influence of Intra-Firm Wage Inequality on Labor Demand
- The Role of the Number of Banks on Debt Dynamics: Evidence from Eurozone Countries
- Infrastructure Development Versus Direct Cash Transfer: A General Equilibrium Comparison
Artikel in diesem Heft
- Frontmatter
- Labor Demand and Unequal Payments: Does Wage Dispersion Matter? Using German Employer-Employee Data to Analyze the Influence of Intra-Firm Wage Inequality on Labor Demand
- The Role of the Number of Banks on Debt Dynamics: Evidence from Eurozone Countries
- Infrastructure Development Versus Direct Cash Transfer: A General Equilibrium Comparison