Financial liberalization, urban unemployment and welfare: some implications of the artificial low interest rate and the high wage rate policies in LDCs

2003 ◽  
Vol 72 (1) ◽  
pp. 163-179 ◽  
Author(s):  
Ichiroh Daitoh
Keyword(s):  
Interest Rate ◽  
Wage Rate ◽  
Financial Liberalization ◽  
High Wage ◽  
Urban Unemployment

Bank Lending Margins in China and the Effects of the June 2012 Liberalization

2014 ◽  
Vol 05 (02) ◽  
pp. 1450003 ◽  
Author(s):  
Richard C. K. Burdekin ◽  
Ran Tao
Keyword(s):  
Interest Rate ◽  
Event Study ◽  
Commercial Banks ◽  
Financial Liberalization ◽  
Initial Response ◽  
Bank Lending ◽  
Profit Margins ◽  
Share Prices ◽  
Chinese Banks ◽  
First Time

Financial liberalization in China has begun to allow more flexibility in bank interest rate setting but may threaten bank profit margins. This paper documents the initial response to the June 2012 initiative that, for the first time, allowed Chinese banks to meaningfully depart from the benchmark rates laid down by the People's Bank. We use an event study to assess the initial effects on bank share prices and compare the response of the larger state-owned banks to the smaller commercial banks. We identify significant reactions in both the Shanghai and Hong Kong markets.

scholarly journals Financial Liberalization and Interest Rate Behaviour: The Nigerian Experience

2021 ◽  
Vol 3 (2) ◽  
pp. 34-47
Author(s):  
 Ogunlokun . ◽  
Ayodele Damilola ◽  
Adeleke . ◽  
Kareem O
Keyword(s):  
Interest Rate ◽  
Financial Liberalization ◽  
Rate Behaviour

Financial Liberalization and Tests of Capital Flow Mobility in Taiwan

2001 ◽  
Vol 04 (04) ◽  
pp. 427-461 ◽  
Author(s):  
Yin K. Wen
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Capital Mobility ◽  
Financial Liberalization ◽  
Capital Flow ◽  
Financial Policies ◽  
Interest Rate Parity ◽  
Rate Parity ◽  
Flow Mobility ◽  
The Government

Taiwan's financial policies played a vital role in promoting its relatively rapid post-war industrialization, a process that involved the use of different financial strategies to accommodate different stages of economic development. This paper aims to examine the process of Taiwan's financial liberalization and the relationship of this process to the opening up of Taiwan's capital account, which can be viewed as the last reform stage for the entire financial liberalization process. The first section briefly introduces the evolution of Taiwan's financial policies during different stages of development, giving primary focus to her efforts at financial liberalization starting in the 1980s. During this period, mid-1987, the time when Taiwan's government promulgated a new law to deregulate foreign exchange control, counts as a watershed for Taiwan's exchange rate market. The second section uses the conventional interest rate parity method to compare the extent of capital flow mobility before and after mid-1987. The results of the comparison show only a slight improvement in capital flow mobility after mid-1987. The author argues that the interest rate parity method may, for various reasons, be inadequate for testing capital mobility in Taiwan's case. Evidence, in the form of measures that the Taiwan's government has taken over time as described in the first section and Appendix, shows that Taiwan's financial markets have become increasingly open and more market-oriented as the financial liberalization process progresses. Although the government is still intervening in both interest rate and exchange rate markets, the trend is toward less intervention, except for a brief period during the 1998-99 Asian Financial Crisis. The final section presents a brief conclusion and directions for further research.

A Modern Post-Mortem on Böhm's Capital Theory: Its Vital Normative Flaw Shared by Presraffian Mainstream Capital Theory

2001 ◽  
Vol 23 (3) ◽  
pp. 301-317 ◽  
Author(s):  
Paul A. Samuelson
Keyword(s):  
Interest Rate ◽  
Nobel Prize ◽  
Real Wage ◽  
Wage Rate ◽  
Post Mortem ◽  
Marginal Productivity ◽  
Capital Theory ◽  
Real Wage Rate ◽  
Friedrich Hayek

The Nobel Prize of Piero Sraffa and Joan Robinson that Stockholm never awarded might have pleased at least one of them. Its citation would have included: “Their investigations uncovered a fatal normative flaw in Böhm-Bawerkian and modern mainstream capital theory.”Just prior to Alfred Marshall's 1890 ascendancy as leading world economist, Eugen von Böhm-Bawerk (1851–1914) perhaps wore that crown thanks to his three-volume treatise on the history and fundamentals of interest theories. Böhm (1884, 1889, 1909, 1912) somewhat independently followed in the footsteps of Stanley Jevons (1871) and himself strongly stimulated Knut Wicksell (1893), Irving Fisher (1906, 1907, 1930), and Friedrich Hayek (1931, 1941). Pugnacious and somewhat incoherent, Böhm and his disciples battled cogently the competing school of John Bates Clark (1899) and Frank Knight (1934, 1935a, 1935b), which idealized a permanent scalar capital alleged to be virtually permanent and with a marginal productivity determining its interest rate in much the same way that primary labor's marginal productivity determines its real wage rate and primary land's marginal productivity determines its real rent rate(s). The Clark-Knight paradigm—and, for that matter, Frank Ramsey's 1928 mathematical clone—shares the Böhm-Hayek vital normative flaw.

Determinants and Stability of Money Demand during Financial Liberalization in Sub-Saharan Africa: The Case of Uganda using an ARDL Approach

2020 ◽  
Author(s):  
Allan Kayongo ◽  
Ibrahim Mukisa ◽  
Ibrahim Mike Okumu
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Money Demand ◽  
Demand Function ◽  
Financial Liberalization ◽  
Money Demand Function ◽  
Real Money ◽  
Financial Innovations ◽  
Long Run ◽  
Demand Stability

Abstract We analyse the determinants and stability of Uganda’s real money demand function during financial liberalization. The study contributes to literature in 4 ways, i.e.: assessing the determinants and stability of Uganda’s money demand function for the financial liberalization period; this is also done while incorporating the presumably disruptive financial innovations; assessing Uganda’s money demand stability during this episode; and applying the ARDL estimation strategy on Uganda’s Monetary Policy. GDP, exchange rate, inflation, interest rate spread and foreign interest rate explain Uganda’s real money demand. The results confirm the existence of a stable long run money demand function. The error correction term is significant and negative. Fundamentally, the financial innovations have not caused structural divergence in Uganda’s long run money demand function as would have been expected. Income is significant and close to unity and therefore a good money demand indicator in both the short and long run. Most importantly, financial innovation efforts in Uganda’s monetary policy should be intensified since they haven’t had negative effects on monetary stability. Keywords: money demand, stability, financial liberalization, financial innovations JEL Classification: E41; E52; E6; O23

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