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.
Diğer ID | JA35JN35ZE |
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Bölüm | Makaleler |
Yazarlar | |
Yayımlanma Tarihi | 1 Haziran 2011 |
Yayımlandığı Sayı | Yıl 2011 Cilt: 3 Sayı: 1 |