 Financial Liberalization in Developing Countries: Keynes, Kalecki and the RentierYilmaz Akyüz Chapter 7 in Poverty, Prosperity and the World Economy, 1995, pp 149-166 from Palgrave Macmillan Abstract: Abstract Interest rate deregulation has become the favourite target of orthodox economists and financial liberalization has become all the rage. Adjustment programmes undertaken in collaboration with the IMF and the World Bank now typically include reforms in the financial system designed to increase the role of markets in determining interest rates and in allocating finance and savings. Underlying this shift in thinking is the hypothesis, initially formulated by McKinnon (1973) and Shaw (1973), that higher real interest rates on domestic financial assets increase the willingness to save income and hence reduce the savings constraint on capital accumulation, and encourage savings to be shifted to financial assets, thereby increasing the availability of investment finance. It is thus argued that the increase in the ratio of financial assets to income (i.e. financial deepening) will be associated with greater savings and faster growth. Keywords: Interest Rate; Disposable Income; Real Interest Rate; Financial Asset; High Interest Rate (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-13658-2_7 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-13658-2_7 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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