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| Author: | Ghatak, S. |
| Title: | Financial liberalisation: the case of Sri Lanka |
| Journal: | Empirical Economics
1997 : VOL. 22:1, p. 117-130 |
| Index terms: | SRI LANKA ECONOMICS FINANCE |
| Language: | eng |
| Abstract: | According to the advocates of financial liberalization in less developed countries (LDCs), a rise in the real interest rates is essential to stimulate savings, investment and the output growth rates. "Structuralists", however, argue that such a rise in the real interest rates could lead to higher inflation, lower investment and lower output when such rates account for a major proportion of the total production costs and loanable funds can be diverted from the unorganized (UMM) to the organized money market (OMM). Here it is difficult to decide in favour of any one of these conflicting views on a purely theoretical ground. |
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