On a pecuniary externality of competitive banking through goods pricing dispersion
Why this work is in the frame
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Bibliographic record
Abstract
We study the interaction between banking, endogenous market power with price dispersion in goods markets, and reserve requirement regulation. If the reserve requirement never binds, then the economy is a banking generalization of Head et al. (2012): the addition of banking has no pecuniary externality on goods trades and banking is always welfare improving. If the reserve requirement binds, there is a positive spread between lending and deposit rates. In this empirically-relevant case, there is a pecuniary externality: banking amplifies retail-goods firms’ market power. Credit- and policy-dependent heterogeneity in retail-good markups implies a non-monotonicity in the welfare-improving role of banks. We explain the novel opposing forces at work. Our model also justifies why policymakers should be worried about the nexus between inflation, banking and industry markups.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.001 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it