Money Demand, Bank Credit, and Economic Performance in Former Socialist Economies
AbstractThis paper examines factors determining the allocation of bank credit to the enterprise sector and the implications of this allocation for aggregate supply and macroeconomic performance in the former socialist economies. It first develops a model to explain how changes in demand for money by the household sector directly influence the availability of working capital, which in turn determines aggregate output and employment. It then examines factors influencing the allocation of bank credit between enterprises and other borrowers, in particular the government. Finally, the paper discusses both the relative merits of bank finance and equity capital in financing medium-term and long-term investment and constraints on the development of efficient equity markets.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 94/3.
Date of creation: 01 Jan 1994
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Other versions of this item:
- Guillermo A. Calvo & Manmohan S. Kumar, 1994. "Money Demand, Bank Credit, and Economic Performance in Former Socialist Economies," IMF Staff Papers, Palgrave Macmillan, vol. 41(2), pages 314-349, June.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
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