Please use this identifier to cite or link to this item:
|Title:||Formal and informal financial markets, and the neo-structuralist critique of the financial liberalization strategy in less developed countries||Authors:||Kapur, B.K.||Issue Date:||Jan-1992||Citation:||Kapur, B.K. (1992-01). Formal and informal financial markets, and the neo-structuralist critique of the financial liberalization strategy in less developed countries. Journal of Development Economics 38 (1) : 63-77. ScholarBank@NUS Repository.||Abstract:||The neo-structuralist critique of the McKinnon-Shaw financial liberalization prescription rests fundamentally on the consideration that formal financial intermediaries have significantly higher reserve ratios than informal ones. However, the economic functions served by these reserves - in terms of 'liquidity enhancement' and 'seignorage creation' - are ignored. Incorporation of the latter function into the analysis leads to the complete neutralisation of the neo-structuralist critique, and incorporation of the former function produces the result that a financial liberalization is unambiguously welfare-increasing. Our optimizing framework also points up an important deficiency in neo-structuralist modelling of substitutions by asset-holders between formal-and informal-sector financial instruments. © 1992.||Source Title:||Journal of Development Economics||URI:||http://scholarbank.nus.edu.sg/handle/10635/132309||ISSN:||03043878|
|Appears in Collections:||Staff Publications|
Show full item record
Files in This Item:
There are no files associated with this item.
checked on Apr 19, 2019
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.