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IS FINANCIAL REPRESSION REALLY BAD?

Year 2011, Volume: 3 Issue: 1, 75 - 84, 01.06.2011

Abstract

This paper examines the relationship between reserve requirements, interest rate
taxes, and long-term growth. I present a model which shows that the government
might repress the financial sector as this is the easy way of channelling resources
to productive sectors.
In this endogenous model, I employ the government input in the firm production
function. The implications of the model are confirmed in that, an increase in
reserve requirements and interest rate controls have two different reverse effects
on growth - one is the negative effect on the financial sector. The other is a
growth enhancing effect from the effective public spending on the real sectors.

References

  • Basu, Parantap(2001), “Reserve Ratio, Seigniorage and Growth”, Journal of
  • Macroeconomics, Vol.23, No.3,pp.397-416. Bartolini, Leonardo and Allan Drazen (1997a), “Capital-Account Liberalization as a Signal”, American Economic Review, Vol. 87, pp. 138–54.
  • Cho, Yoon-Je(1989), “Finance and Development: The Korean Approach”, Oxford
  • Review of Economic Policy, Vol. 5, pp. 88-102. Diaz-Gimenez, Javier, Edward C. Prescott, Terry Fitzgerald and Fernando Alvarez(1992), “Banking in Computable General Equilibrium Economies.”,
  • Journal of Economic Dynamics and Control, Vol.16, pp.533-559. Prasad,Eswar S, Kenneth Rogoff, Shang-Jin Wei and M.Ayhan Kose (2003),
  • “Effects of Financial Globalization on Developing Countries: Some Empirical Evidence”, IMF Staff Papers, Vol.50, pp119-142. Roubini, Nouriel and Xavier Sala-i-Martin (1994), “A growth model of inlfation, tax evasion, and financial repression”, Journal of Monetary Economics, Vol.35,pp.275-301.
  • McKinnon, Ronald I (1973), Money and Capital in Economic Development ,
  • Washington, DC: Brookings Institution.
Year 2011, Volume: 3 Issue: 1, 75 - 84, 01.06.2011

Abstract

References

  • Basu, Parantap(2001), “Reserve Ratio, Seigniorage and Growth”, Journal of
  • Macroeconomics, Vol.23, No.3,pp.397-416. Bartolini, Leonardo and Allan Drazen (1997a), “Capital-Account Liberalization as a Signal”, American Economic Review, Vol. 87, pp. 138–54.
  • Cho, Yoon-Je(1989), “Finance and Development: The Korean Approach”, Oxford
  • Review of Economic Policy, Vol. 5, pp. 88-102. Diaz-Gimenez, Javier, Edward C. Prescott, Terry Fitzgerald and Fernando Alvarez(1992), “Banking in Computable General Equilibrium Economies.”,
  • Journal of Economic Dynamics and Control, Vol.16, pp.533-559. Prasad,Eswar S, Kenneth Rogoff, Shang-Jin Wei and M.Ayhan Kose (2003),
  • “Effects of Financial Globalization on Developing Countries: Some Empirical Evidence”, IMF Staff Papers, Vol.50, pp119-142. Roubini, Nouriel and Xavier Sala-i-Martin (1994), “A growth model of inlfation, tax evasion, and financial repression”, Journal of Monetary Economics, Vol.35,pp.275-301.
  • McKinnon, Ronald I (1973), Money and Capital in Economic Development ,
  • Washington, DC: Brookings Institution.
There are 8 citations in total.

Details

Other ID JA35JN35ZE
Journal Section Articles
Authors

Eun Young Oh This is me

Publication Date June 1, 2011
Published in Issue Year 2011 Volume: 3 Issue: 1

Cite

APA Oh, E. Y. (2011). IS FINANCIAL REPRESSION REALLY BAD?. International Journal of Economics and Finance Studies, 3(1), 75-84.
AMA Oh EY. IS FINANCIAL REPRESSION REALLY BAD?. IJEFS. June 2011;3(1):75-84.
Chicago Oh, Eun Young. “IS FINANCIAL REPRESSION REALLY BAD?”. International Journal of Economics and Finance Studies 3, no. 1 (June 2011): 75-84.
EndNote Oh EY (June 1, 2011) IS FINANCIAL REPRESSION REALLY BAD?. International Journal of Economics and Finance Studies 3 1 75–84.
IEEE E. Y. Oh, “IS FINANCIAL REPRESSION REALLY BAD?”, IJEFS, vol. 3, no. 1, pp. 75–84, 2011.
ISNAD Oh, Eun Young. “IS FINANCIAL REPRESSION REALLY BAD?”. International Journal of Economics and Finance Studies 3/1 (June 2011), 75-84.
JAMA Oh EY. IS FINANCIAL REPRESSION REALLY BAD?. IJEFS. 2011;3:75–84.
MLA Oh, Eun Young. “IS FINANCIAL REPRESSION REALLY BAD?”. International Journal of Economics and Finance Studies, vol. 3, no. 1, 2011, pp. 75-84.
Vancouver Oh EY. IS FINANCIAL REPRESSION REALLY BAD?. IJEFS. 2011;3(1):75-84.