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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Explaining structural change towards and within the financial sector
Organization Unit
  • Josef Falkinger
  • Sabrina Studer
  • Yingnan Zhao
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 206
ISSN 1664-7041
Number of Pages 84
Date 2015
Abstract Text This paper presents a 3x3 general equilibrium model of an OLG-economy with technological uncertainty, heterogeneous agents and quasi-homothetic preferences to analyze structural change between the real and the financial sector as well as within the financial sector. Besides the consumption and investment good two types of financial services are produced. The three factors of production are: Capital, skilled and unskilled labor. Financial services are needed for transforming savings into future consumption possibilities. The financial market provides deposits and an incomplete set of securities. Payoffs of assets are determined by the future profitability of the technolo- gies in which they are invested. We show the channels through which structural change and inequality reinforce each other and show how they simultaneously emerge from rising per-capita income, an increase in skill supply and technical change.
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Keywords Structural change, financialization, quasi-homothetic portfolio decision, inequality, Strukturwandel, Präferenz, Investition, Gütermarkt, Kreditmarkt, Ungleichheit, Einkommen