Banks, Growth and Geography

27 Pages Posted: 29 Sep 2009

See all articles by Raju Singh

Raju Singh

International Monetary Fund (IMF)

Date Written: May 1, 1997


This paper presents a general equilibrium endogenous growth model, in which financial intermediaries evaluate the quality of projects, mobilize savings to finance the most promising ones and diversify risk. Information technology available to banks is linked to geographic proximity. This valuation capacity increases the proportion of high-return projects being financed, and thereby accelerates economic growth. This positive effect does not depend on the degree of individuals' risk aversion.

Keywords: financial intermediation, endogenous growth, imperfect information, screening

JEL Classification: D82, E20, E44, G20, O16

Suggested Citation

Singh, Raju, Banks, Growth and Geography (May 1, 1997). Available at SSRN: or

Raju Singh (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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