Further evidence One way to draw out some further implications of the model is to focus on the key comparative static, dµi/dfi < 0 – namely, that banks have a bigger market share in moreilliquid assets. Now, of course in the real world, there are many different kinds of financial intermediaries, not just two as in our simple model.
From 2003 to 2008, real household consumption growth averaged 5.8 percent. Real gross fixed capital formation grew by an annual average of 12.6 percent. Compared with the 1990s, average annual real GDP growth was 4.6 percent over this period.