The distinction between bank- and market-based economies has a long tradition in applied macroeconomics. The two types of
financial architecture differ not only with respect to the amount of funds channelled through private banking versus the capital
market but with respect to several other characteristics, suggesting a competitive rather than a complementary relation between
bank- and market-based institutions. Following the idea of Song and Thakor (2010) we test for the hypothesis that the efficiency
of financial systems increases for more balanced financial systems, featuring both kinds of institutions in equal measure.
We compute an index of complementarity and relate this index and other variables representing various feedback channels of
co-evolution to measures for the efficiency of credit and capital markets in a panel of industrial countries.
Forschungsbereich:Makroökonomie und europäische Wirtschaftspolitik