["International Economic Review, EarlyView. ", "\nABSTRACT\nWe quantitatively analyze the impact of US banking deregulation in the 1980s on the aggregate economy. Using recent econometric techniques, we first reexamine existing empirical evidence on the real effects of banking deregulation. We then construct a quantitative model that integrates imperfectly competitive banks into a general equilibrium framework of firm dynamics and occupational choice. Consistent with the empirical evidence, deregulation significantly increases output growth and firm entry. Increased competition among banks and the entrepreneurs' occupational choices play an important role in shaping the economy's response to deregulation."]