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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26293
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| Title: | The Equilibrium Size of the Financial Sector |
| Authors: | Philippon, Thomas |
| Issue Date: | Aug-2007 |
| Series/Report no.: | FIN-07-007 |
| Abstract: | Over the past 60 years, the value added of the U.S. financial sector has
grown from 2.3% to 7.7% of GDP. I present a model of the equilibrium
size of this industry and I study the factors that might explain its
evolution. According to the model, a shift in the joint distribution of
cash flows and investment opportunities across U.S. firms has increased
the demand for financial services. Improvements in the relative
efficiency of the finance industry also play a role. Without these
improvements, a much larger fraction of firms would be financially
constrained today. |
| URI: | http://hdl.handle.net/2451/26293 |
| Appears in Collections: | Finance Working Papers
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