The Puzzle of Persistently Negative Interest Rate-Growth Differentials : Financial Repression or Income Catch-Up? /

The interest rate-growth differential (IRGD) shows a marked correlation with GDP per capita. It has been on average around 1 percentage point for large advanced economies during 1999-2008; but below -7 percentage points among non-advanced economies - exerting a powerful stabilizing influence on gove...

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التفاصيل البيبلوغرافية
المؤلف الرئيسي: Shabunina, Anna
مؤلفون آخرون: Escolano, Julio, Woo, Jaejoon
التنسيق: دورية
اللغة:English
منشور في: Washington, D.C. : International Monetary Fund, 2011.
سلاسل:IMF Working Papers; Working Paper ; No. 2011/260
الوصول للمادة أونلاين:Full text available on IMF
الوصف
الملخص:The interest rate-growth differential (IRGD) shows a marked correlation with GDP per capita. It has been on average around 1 percentage point for large advanced economies during 1999-2008; but below -7 percentage points among non-advanced economies - exerting a powerful stabilizing influence on government debt ratios. We show that large negative IRGDs are largely due to real interest rates well below market equilibrium - possibly stemming from financial repression and captive and distorted markets, whereas the income catch-up process plays a relatively modest role. We find econometric support for this conjecture. Therefore, the IRGD in non-advanced economies is likely to rise with financial integration and market development, well before their GDP per capita converges to advanced-economy levels.
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وصف مادي:1 online resource (29 pages)
التنسيق:Mode of access: Internet
تدمد:1018-5941
وصول:Electronic access restricted to authorized BRAC University faculty, staff and students