Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5092546 | Journal of Comparative Economics | 2008 | 22 Pages |
Abstract
This paper estimates the social costs of market power (Harberger's triangle) in the Mexican banking system over the period 1993-2005. It also tests the so-called “quiet life” hypothesis which postulates a negative effect of market power on bank management efficiency. The social cost attributable to market power in 2005 is 0.15% of GDP, while that deriving from the cost (profit) inefficiency of banking management is 0.021% (0.075%) of GDP. The results allow us to reject the quiet life hypothesis in the deposits market. However, market power in the setting of the interest rate on loans has a negative effect on cost efficiency. Journal of Comparative Economics 36 (3) (2008) 467-488.
Related Topics
Social Sciences and Humanities
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Authors
Liliana SolÃs, JoaquÃn Maudos,