Financial Repression, Bank Deposits, Real Assets and Black Money
Consider real assets and bank deposits. If returns on deposits improve due to reduction in financial repression, then investment in real assets can fall. However, if role of black money in real asset (secondary) market falls, then investment in the primary market can rise. So financial development will occur if the effect of reduction in financial repression is stronger than that of reduction of black money. This is shown in a model, with forced sales (due to liquidity shock), and strategic sales of real assets (under asymmetric information). Under some conditions, price is irrelevant for strategic trades.
|Date of creation:|
|Contact details of provider:|| Web page: http://www.jnu.ac.in/Academics/Schools/SchoolOfInternationalStudies/CITD/|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gorton, Gary & Pennacchi, George, 1990. " Financial Intermediaries and Liquidity Creation," Journal of Finance, American Finance Association, vol. 45(1), pages 49-71, March.
When requesting a correction, please mention this item's handle: RePEc:ind:citdwp:09-05. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamprasad M. Pujar)
If references are entirely missing, you can add them using this form.