Abstract: Networks and History's Generalizations: Comparing the Financial Systems of Germany, Japan, Great Britain, and the United States

Richard Sylla and Robert E. Wright


If it is correct to generalize that, historically, Germany and Japan have had bank-oriented or bank-dominated financial systems, while Great Britain and the United States have had more market-oriented financial systems, then different network structures may have characterized these pairs' financial systems. We explore that possibility, along with a few possible reasons that might account for such differing network characteristics. We also consider if viewing modern financial systems as networks and examining their network externalities might support some scholars' contentions that economic growth, both historically and in recent decades, was somewhat dependent on well-functioning financial systems and may even have been finance led.

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