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Macroeconomic Management with Informal Financial Markets

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Author Info
Agenor, Pierre-Richard
Haque, Nadeem U

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Abstract

Informal credit and foreign currency markets are a widespread phenomenon in developing countries. This paper begins by reviewing the scope and nature of these markets, and the channels through which they operate. It then examines their implications for macroeconomic management, particularly in the areas of monetary and exchange rate policies, interest rate liberalization, and foreign exchange market unification. The analysis emphasizes the importance of accounting for the presence of informal markets in the design of macroeconomic reform programmes. Copyright @ 1996 by John Wiley & Sons, Ltd. All rights reserved.

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Article provided by John Wiley & Sons, Ltd. in its journal International Journal of Finance & Economics.

Volume (Year): 1 (1996)
Issue (Month): 2 (April)
Pages: 87-101
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Handle: RePEc:ijf:ijfiec:v:1:y:1996:i:2:p:87-101

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  1. Paul Castillo & Diego Winkelried, 2007. "Dollarization Persistence and Individual Heterogeneity," Working Papers 2007-004, Banco Central de Reserva del Perú. [Downloadable!]
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