Some Reflections on the Relation Between Finance and Distribution in the 1980s

1992 ◽  
Author(s):  
J. A. Kregel
Keyword(s):  
Interest Rate ◽  
Technological Change ◽  
Financial Structure ◽  
High Interest Rate ◽  
Interest Rate Policy ◽  
High Interest ◽  
Savings And Loan ◽  
Rate Policy ◽  
Functional Distribution

Growth and technological change have created difficulties in linking changes in individual and functional distribution. The problem is complicated by changes in financial structure in the 1980s; making it more difficult to trace the effect on distribution of such events is the increase in government indebtedness, high interest rate policy, or the collapse of savings and loan banks. This paper tries to outline these difficulties and is a first step in assessing how these factors affect individual distribution.

What Would Have Happened in Indonesia if Different Economic Policies Had Been Implemented When the Crisis Started?

2002 ◽  
Vol 1 (2) ◽  
pp. 75-103 ◽  
Author(s):  
Iwan J. Azis
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Income Distribution ◽  
High Interest Rate ◽  
Interest Rate Policy ◽  
Net Worth ◽  
High Interest ◽  
Lower Interest Rate ◽  
Rate Policy ◽  
Business Confidence

Many models of the Indonesian economy cannot generate the large collapses in output and exchange rate experienced in 1997–98. The model in this paper was able to replicate the actual events by adding several new links. One new link is between the depreciation of the exchange rate and the deterioration of the balance sheets of firms, which are in turn linked to decline in investment. Another new link is between decline in output and decline in business confidence, leading to possible increased capital outflow and exchange rate collapse. The IMF's high interest rate policy did not succeed in strengthening the rupiah because it inflicted such severe damage on the net worth of Indonesian firms that it caused capital flight to accelerate, turning what was originally just a financial crisis into a major recession. Two alternative counterfactual policy packages are examined: (1) a lower interest rate policy and (2) a lower interest rate policy combined with a partial write-down of the external debt. The model indicates that the country's macroeconomic conditions would have fared better if the prolonged high interest rate policy had been avoided. The results suggest that early actions should have been undertaken to address the mounting private foreign debts. The delayed handling of private debts had prevented other policies from working effectively. The two counterfactual policies also would have resulted in a more favorable outcome for income distribution and poverty incidence. The model revealed a close correlation between worsening (improving) income distribution and increasing (declining) interest rates.

Consequences of a High Interest Rate Policy in the Process of Disinflation. The Case of Poland

1998 ◽  
Vol 9 (1) ◽  
pp. 15-31 ◽  
Author(s):  
Alojzy Z. Nowak ◽  
Kazimierz Ryć ◽  
Jerzy Żyżński
Keyword(s):  
Interest Rate ◽  
Banking Sector ◽  
Banking System ◽  
Research Programme ◽  
Open Market ◽  
High Interest Rate ◽  
Interest Rate Policy ◽  
The Real ◽  
High Interest ◽  
Rate Policy

The aim of the article is to analyse the consequences of a high interest rate policy pursued in Poland since 1990 in the process of disinflation. The interest rate was the main instrument of monetary policy in a situation when the economy lacked a money market on which the money supply could be influenced directly by open market operations. The application of a high interest rate had many unfavourable consequences both in the real sphere and in the financial sphere. The most important of these consequences in the real sphere was that it forced self-financing on the part of enterprises, the ineffective allocation of resources, delays in carrying out investments, the cyclicity of demand; the effects in the financial sphere mainly concern the banking sector, where the assets of the banking system become distorted, while for enterprises the most important consequences result from the high cost of credit, which increases costs and reduced the competitiveness of enterprises dependent on credit. The authors analyse these consequences and formulate hypotheses and a research programme for testing them.

scholarly journals Effectiveness of high interest rate policy on exchange rates: A reexamination of the Asian financial crisis

2006 ◽  
Vol 2006 ◽  
pp. 1-9 ◽  
Author(s):  
Tim Brailsford ◽  
Jack H. W. Penm ◽  
Chin Diew Lai
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Exchange Rates ◽  
Interest Rates ◽  
Asian Financial Crisis ◽  
The Philippines ◽  
High Interest Rate ◽  
Interest Rate Policy ◽  
High Interest ◽  
Rate Policy

One of the most controversial issues in the aftermath of the Asian financial crisis has been the appropriate response of monetary policy to a sharp decline in the value of some currencies. In this paper, we empirically examine the effects on Asian exchange rates of sharply higher interest rates during the Asian financial crisis. Taking account of the currency contagion effect, our results indicate that sharply higher interest rates helped to support the exchange rates of South Korea, the Philippines, and Thailand. For Malaysia, no significant causal relation is found from the rate of interest to exchange rates, as the authorities in Malaysia did not actively adopt a high interest rate policy to defend the currency.

PENGARUH PEMBERIAN KREDIT USAHA EKONOMI PRODUKTIF TERHADAP PENINGKATAN PENDAPATAN MASYARAKAT

2018 ◽  
Vol 4 (1) ◽  
pp. 67-75
Author(s):  
Anang Rohmad Jatmiko ◽  
Mohamad Fathur Rohman ◽  
Mas'adah M.Si
Keyword(s):  
Statistical Analysis ◽  
Interest Rate ◽  
Significant Influence ◽  
Target Group ◽  
High Interest Rate ◽  
High Interest ◽  
Productive Activities ◽  
Savings And Loan ◽  
Public Revenue ◽  
Public Revenues

 The purpose of this study was to determine the effect of micro-credit to the productive economy increase public revenues, to identify any obstacles in lending economically productive activities. The method used was a survey and interviews. Analysis of the data used statistical analysis. The results of his research are no significant influence of the credit to the improvement of people's income. As the amount of increase in public revenue that runs in line with the amount of credit, then increase the number of their loans to be more and more people will receive credit so that more and more people whose incomes rise. Obstacles encountered in lending is a discrepancy in lending, mistakes in lending, error target in lending to the target group, the competitor that lenders are the same, most people are reluctant to accept credit reasons cannot return, and society productive get credit easily from the savings and loan cooperatives that without using a complicated procedure with a high-interest rate.

Analysis of the Bank of Russia information policy

2017 ◽  
pp. 88-110 ◽  
Author(s):  
S. Drobyshevsky ◽  
P. Trunin ◽  
A. Bozhechkova ◽  
E. Gorunov ◽  
D. Petrova
Keyword(s):  
Interest Rate ◽  
Nonparametric Tests ◽  
Information Policy ◽  
Var Models ◽  
New Approach ◽  
Interest Rate Policy ◽  
News Reports ◽  
Internet Users ◽  
Rate Policy ◽  
Exchange Markets

The article investigates the Bank of Russia information policy using a new approach to measuring information effects on Russian data, including the analysis of the tonality of news reports, as well as internet users’ queries on Google. The efficiency of regulator’s information signals is studied using EGARCH-, VAR- models, as well as nonparametric tests. The authors conclude that the regulator communicates effectively in terms of the predictability of interest rate policy, the degree to which information signals affect the money and foreign exchange markets.

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