Financial Deepening

John Moore, Nobuhiro Kiyotaki

Research output: Contribution to journalArticlepeer-review


We develop a model of financial deepening, based on the distinction between limited bilateral commitment and limited multilateral commitment. We explore the effects of secular changes in financial depth on investment and output; on intermediation and interest rates; on the long-run velocities of circulation of different monetary instruments, and the use of outside money; on the patterns of saving and trade in paper. Three stages of financial development are identified.
Original languageEnglish
Pages (from-to)701-714
Number of pages14
JournalJournal of European Economic Association
Issue number2-3
Publication statusPublished - 2005


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