• agent-based
• banking sector
• growth
• interbank market

We use our Python-programmed replication of Fagiolo et al. (2020) to reproduce main results of this agent-based model (ABM). Then, we expand it by adding an interbank market. In particular, we allow banks to prevent liquidity shortages by establishing lending relationships with each other. In this way, the banking system becomes more efficient: banks do not run out of liquidity, and overall loans to real sector increase, allowing higher investments in innovation and technological imitation. This can favor economic growth. However, we find that interconnections among banks increase output growth rates volatility.