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Unorganized Money Markets and 'Unproductive' Assets in the New Structuralist Critique of Financial Liberalization

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  • Owen, P. Dorian
  • Solis-Fallas, Otton

Abstract

The new structuralists' critique of financial liberalization emphasizes the role of informal credit markets in financing firms' residual credit demand in LDCs and the relevance of households' portfolio substitution patterns. The sensitivity of their policy conclusions is demonstrated in the context of a representative model developed by van Wijnbergen; the relative efficiency of intermediation in the formal and informal credit markets crucially affects the outcome of the portfolio allocation effects generated by higher bank deposit rates. An anomaly in the characterization of 'unproductive' assets in defining credit supply is also examined.

Suggested Citation

  • Owen, P. Dorian & Solis-Fallas, Otton, "undated". "Unorganized Money Markets and 'Unproductive' Assets in the New Structuralist Critique of Financial Liberalization," Department of Economics Discussion Papers 262919, University of Canterbury - New Zealand.
    • Handle: RePEc:ags:canzdp:262919
    DOI: 10.22004/ag.econ.262919
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    2. Yilmaz Akyüz, 1994. "Libéralisation financière : mythes et réalités," Revue Tiers Monde, Programme National Persée, vol. 35(139), pages 521-555.
    3. Mamoon, Dawood & Nicholas, Howard, 2017. "Financial Liberalisation and Economic Growth: A Preliminary Analysis," MPRA Paper 82976, University Library of Munich, Germany.
    4. James B. Ang, 2008. "A Survey Of Recent Developments In The Literature Of Finance And Growth," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 536-576, July.
    5. Mamoon, D., 2004. "Financial sector reforms in Pakistan and a test for McKinnon and Shaw's transmission mechanism : 'Lessons from the last decade'," ISS Working Papers - General Series 19157, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    6. Konstantinos Loizos, 2018. "The Financial Repression†Liberalization Debate: Taking Stock, Looking For A Synthesis," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 440-468, April.
    7. Gupta, Kanhaya L. & Lensink, Robert, 1996. "Allocative efficiency and financial deregulation," International Review of Economics & Finance, Elsevier, vol. 5(1), pages 35-49.
    8. Elsa Assidon, 1996. "L' « approfondissement financier » : épargne et crédit bancaires," Revue Tiers Monde, Programme National Persée, vol. 37(145), pages 153-171.
    9. Daniel, Betty C. & Kim, Hong-Bum, 1996. "Financial dualism in a cash-in-advance economy," Journal of Macroeconomics, Elsevier, vol. 18(2), pages 213-234.

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