IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v55y1979i4p347-353.html
   My bibliography  Save this article

Interest Rate Flexibility and the Open Economy

Author

Listed:
  • E. KIERNAN

Abstract

The objective of the paper is to analyze the importance of institutional changes in the financial system for the efficacy of monetary policy and in particular for the connection between the balance of payments (capital account) and monetary policy. Particular institutional developments studied include the emergence of certificates of deposit and the removal of interest rate ceilings in 1973. The result established, using a general equilibrium model, is that the degree to which transactions in the capital account of the balance of payments offset a domestic monetary expansion is greater in a regime of market‐determined interest rates than in a regime of administered rates.

Suggested Citation

  • E. Kiernan, 1979. "Interest Rate Flexibility and the Open Economy," The Economic Record, The Economic Society of Australia, vol. 55(4), pages 347-353, December.
    • Handle: RePEc:bla:ecorec:v:55:y:1979:i:4:p:347-353
    DOI: 10.1111/j.1475-4932.1979.tb02239.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4932.1979.tb02239.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4932.1979.tb02239.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Miller, Marcus H, 1973. ""Competition and Credit Control" and the Open Economy," The Manchester School of Economic & Social Studies, University of Manchester, vol. 41(1), pages 123-140, March.
    2. Tobin, James, 1970. "Deposit Interest Ceilings as a Monetary Control," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 2(1), pages 4-14, February.
    3. Valentine, T J, 1973. "The Loan Supply Function of Australian Trading Banks: An Empirical Analysis," Australian Economic Papers, Wiley Blackwell, vol. 12(20), pages 57-69, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mirakhor, Abbas & Zaidi, Iqbal, 1988. "Stabilization and Growth in an Open Islamic Economy," MPRA Paper 56003, University Library of Munich, Germany.
    2. Arend, Mario, 2009. "A Small Open Economy with Heterogenous Agents Facing Interest Rate Ceilings on Loans," MPRA Paper 19427, University Library of Munich, Germany.
    3. Eric Monnet, 2014. "Monetary Policy without Interest Rates: Evidence from France's Golden Age (1948 to 1973) Using a Narrative Approach," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 137-169, October.
    4. John W. Freebairn, 1983. "Drought Assistance Policy," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 27(3), pages 185-199, December.
    5. J. Huston McCulloch, 1977. "Misintermediation and Business Fluctuation," NBER Working Papers 0160, National Bureau of Economic Research, Inc.
    6. R. P. Albon & T. J. Valentine, 1977. "The Sectoral Demand for Bank Loans in Australia," The Economic Record, The Economic Society of Australia, vol. 53(2), pages 167-181, June.
    7. Jingya Li & Ming-Hua Liu, 2019. "Interest rate liberalization and pass-through of monetary policy rate to bank lending rates in China," Frontiers of Business Research in China, Springer, vol. 13(1), pages 1-19, December.
    8. Marco A. Espinosa-Vega & Bruce Smith, 2001. "Socially excessive bankruptcy costs and the benefits of interest rate ceilings on loans," FRB Atlanta Working Paper 2001-27, Federal Reserve Bank of Atlanta.
    9. Paulo Esteves & Maximiano Pinheiro, 2020. "Deposit interest rate ceilings," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:55:y:1979:i:4:p:347-353. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.