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Capital Based Macroeconomic model and 100 percent reserve system, free banking system and BFH system: A Comparism among Latvia, Lithuania, Kazakhstan, and Kyrgyzstan

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  • Baafi Antwi, Joseph

Abstract

This essay extends the capital based macroeconomic theory to include international capital flow thus extending it to an open economy and analyze it in the context of the BFH system, Free banking system and 100 percent reserve ration. In all these, it was noticed that interest rate will barely change even though the possibility of interest rate changes was not ruled out completely. A test of these systems was conducted on Latvia, Lithuanian, Kazakhstan and Kyrgyzstan and was successful. However, it must be noted that these are just prepositions as these system are not in place at the moment. In furtherance to this, past and present monetary system used by the countries exhibited similarities to these systems, even though difference could largely be seen.

Suggested Citation

  • Baafi Antwi, Joseph, 2010. "Capital Based Macroeconomic model and 100 percent reserve system, free banking system and BFH system: A Comparism among Latvia, Lithuania, Kazakhstan, and Kyrgyzstan," MPRA Paper 22935, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:22935
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    File URL: https://mpra.ub.uni-muenchen.de/22935/1/MPRA_paper_22935.pdf
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    References listed on IDEAS

    as
    1. Karen K. Lewis, 1999. "Trying to Explain Home Bias in Equities and Consumption," Journal of Economic Literature, American Economic Association, vol. 37(2), pages 571-608, June.
    2. Albuquerque, Rui & H. Bauer, Gregory & Schneider, Martin, 2009. "Global private information in international equity markets," Journal of Financial Economics, Elsevier, vol. 94(1), pages 18-46, October.
    3. Maurice Obstfeld & Kenneth S. Rogoff, 2005. "Global Current Account Imbalances and Exchange Rate Adjustments," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 36(1), pages 67-146.
    4. Paolo Mauro & Nathan Sussman & Yishay Yafeh, 2002. "Emerging Market Spreads: Then versus Now," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 695-733.
    5. Coeurdacier, Nicolas, 2009. "Do trade costs in goods market lead to home bias in equities?," Journal of International Economics, Elsevier, pages 86-100.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    International Capital Flows: Interest rate: 100 percent reserve system: free banking system: BFH system;

    JEL classification:

    • F0 - International Economics - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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