High Real Interest Rates Under Financial Liberalization
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Author | : Vicente Galbis |
Publisher | : International Monetary Fund |
Total Pages | : 94 |
Release | : 1993-01-01 |
Genre | : Business & Economics |
ISBN | : 1451842368 |
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Concerns were raised beginning in the 1980s about the possible detrimental effects of high positive real interest rates under financial liberalization. Using a sample of 28 countries that underwent financial liberalization since the 1970s, the paper examines the evidence about the emergence of high real interest rates and discusses the possible causes and likely effects. Some remedies--preferably preventive--are considered including macroeconormic stabilization, fiscal consolidation, improvements in prudential regulation and supervision of the financial sector, and introduction of an efficient management of indirect monetary policy instruments.
Author | : Ronald I. McKinnon |
Publisher | : ICS Press |
Total Pages | : 54 |
Release | : 1988 |
Genre | : Asia |
ISBN | : |
Download Financial Liberalization and Economic Development Book in PDF, Epub and Kindle
Author | : Fondo Monetario Internacional |
Publisher | : |
Total Pages | : 88 |
Release | : 1993 |
Genre | : |
ISBN | : |
Download High real interest rates under financial liberalization is there a problem? Book in PDF, Epub and Kindle
Author | : Mr.Bart Turtelboom |
Publisher | : International Monetary Fund |
Total Pages | : 46 |
Release | : 1991-12-01 |
Genre | : Business & Economics |
ISBN | : 1451939183 |
Download Interest Rate Liberalization Book in PDF, Epub and Kindle
This paper undertakes a survey of theoretical considerations and an analysis of the experience of five African countries with interest rate liberalization. Despite substantial progress in monetary policy reforms, liberalization has only partially affected the level and variability of interest rates. Several factors—macroeconomic instability, oligopolistic financial markets, the absence of developed capital markets, as well as the sequencing of the liberalization programs and the asymmetric availability of information—explain the increase in the spread between lending and deposit rates as well as the rather inflexible pattern of interest rates during the transition to a market-based financial system.
Author | : Vicente Galbis |
Publisher | : South East Asian Central Banks Research and Training Centre |
Total Pages | : 116 |
Release | : 1998 |
Genre | : Business & Economics |
ISBN | : |
Download High Real Interest Rates Under Financial Liberalisation Book in PDF, Epub and Kindle
Author | : Mr.Bart Turtelboom |
Publisher | : International Monetary Fund |
Total Pages | : 50 |
Release | : 1991-12 |
Genre | : Business & Economics |
ISBN | : |
Download Interest Rate Liberalization Book in PDF, Epub and Kindle
This paper undertakes a survey of theoretical considerations and an analysis of the experience of five African countries with interest rate liberalization. Despite substantial progress in monetary policy reforms, liberalization has only partially affected the level and variability of interest rates. Several factors—macroeconomic instability, oligopolistic financial markets, the absence of developed capital markets, as well as the sequencing of the liberalization programs and the asymmetric availability of information—explain the increase in the spread between lending and deposit rates as well as the rather inflexible pattern of interest rates during the transition to a market-based financial system.
Author | : Nemat Shafik |
Publisher | : World Bank Publications |
Total Pages | : 37 |
Release | : 1991 |
Genre | : Crecimiento economico |
ISBN | : |
Download Are High Real Interest Rates Bad for World Economic Growth? Book in PDF, Epub and Kindle
The conventional wisdom says yes. But close examination suggests the answer is not nearly so clear-cut.
Author | : Reuven Glick |
Publisher | : |
Total Pages | : 50 |
Release | : 1988 |
Genre | : Interest rates |
ISBN | : |
Download Financial Liberalization in the Pacific Basin Book in PDF, Epub and Kindle
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 34 |
Release | : 1990-01-01 |
Genre | : Business & Economics |
ISBN | : 1451927606 |
Download Interest Rate Policies, Stabilization, and Bank Supervision in Developing Countries Book in PDF, Epub and Kindle
This paper identifies macroeconomic stability, effective bank supervision, and an appropriate sequencing of stabilization, banking regulations, and interest rate policies as common characteristics of the relatively successful experiments in financial sector liberalization. Recent theoretical developments help to explain why interest rates in free markets for bank credit may fall short of market-clearing levels, or may rise to risky levels with adverse consequences for financial institutions and the economy at large. To prevent such outcomes, macro-economic stabilization and improved bank supervision should generally precede complete removal of control on bank interest rates.
Author | : Edmar L. Bacha |
Publisher | : International Monetary Fund |
Total Pages | : 34 |
Release | : 2007-12 |
Genre | : Business & Economics |
ISBN | : |
Download Is Brazil Different? Risk, Dollarization, and Interest Rates in Emerging Markets Book in PDF, Epub and Kindle
We investigate the role of financial dollarization in the determination of real interest rates in emerging economies. In a simple analytical model, we show that a strategy of "dedollarizing" the economy, if it fails to address fundamental macroeconomic risks, leads to higher domestic real interest rates. We confirm this prediction in an empirical model, but find that the effect is small after controlling for the risks of dilution and default. Brazil provides a natural case study given its low degree of financial dollarization and very high real interest rates. The estimated model is unable to explain the high interest rate levels in the aftermath of Brazil's 1994 inflation stabilization. However, since the adoption in 1999 of inflation targeting and floating exchange rates, Brazil's real interest rates are gradually converging to the model's predicted values. The estimation also shows that further drops in Brazil's real interest rates could be achieved more effectively through improvements in fundamentals that lead to investment-grade status rather than through financial dollarization.