An Analytical Approach to Interest Rate Determination in Developing Countries
AbstractThe role of interest rates in the development process has been studied exten· sively in recent years. Following upon the seminal work of McKinnon (1973), there have been a number of theoretical and empirical studies examining the relationship between financial development and economic growth, the effect of changes in real interest rates on savings and investment, and more generally, the pros and cons of a market-oriented financial system.1 Broadly speaking, there is now ample empirical evidence supporting the original claim by McKinnon  that there is a positive association between the degree of development of the financial sector, resulting primarily from a freer structure of interest rates, and the overall economic performance of developing countries.
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Bibliographic InfoArticle provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.
Volume (Year): 24 (1985)
Issue (Month): 3-4 ()
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- Willett, Thomas D. & Keil, Manfred W. & Ahn, Young Seok, 2002. "Capital mobility for developing countries may not be so high," Journal of Development Economics, Elsevier, vol. 68(2), pages 421-434, August.
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- Ozatay, Fatih, 1997. "Sustainability of fiscal deficits, monetary policy, and inflation stabilization: The case of Turkey," Journal of Policy Modeling, Elsevier, vol. 19(6), pages 661-681, December.
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