Monetary and Financial Policies in Developing Countries: Growth and Stabilization (Routledge Studies in Development Economics, 2)

✍ Scribed by Anis Chowdhury

• Year: 1996
• Tongue: English
• Leaves: 194
• Edition: 1
• Category: Library

✦ Synopsis

The issue of economic development and monetary stability has produced one of the most passionate debates in economic literature. Yet, much of the evidence employed in this debate is contradictory. Monetary and Financial Policies in Developing Countries: Growth and Stabilization brings together diverse views on the subject within a coherent framework. The work includes: * a balanced assessment of empirical findings and their theoretical foundations on the role of money and growth * a discussion of financial liberalization reform in developing countries * an analysis of monetary policy as an instrument of economic stabilization * an examination of the monetary supply and demand process in developing countries * a study of the relationship between money, credit, the balance of payments, inflation and the exchange rate system * a reflection on market failures and the role of government.

✦ Table of Contents

BOOK COVER......Page 1
HALF-TITLE......Page 2
TITLE......Page 4
DEDICATION......Page 5
COPYRIGHT......Page 6
CONTENTS......Page 7
ILLUSTRATIONS......Page 10
PREFACE......Page 12
1 INTRODUCTION......Page 14
TAMING BUSINESS CYCLES: THE ROLE OF MONETARY POLICY IN THE SHORT RUN......Page 15
PROMOTING ECONOMIC GROWTH: THE ROLE OF MONETARY POLICY IN THE LONG RUN......Page 16
Sources of growth and monetary policy......Page 17
Money, inflation and economic growth: theory and evidence......Page 20
Monetary policy as a tool of economic stabilisation......Page 21
Design and conduct of monetary policy......Page 22
Fiscal and monetary constitution......Page 23
NOTES......Page 24
2 MONEY AND FINANCE IN ECONOMIC GROWTH......Page 25
Neutrality of money......Page 26
Superneutrality of money......Page 27
The Tobin model......Page 28
Critique of the Tobin effect......Page 30
Inflation, income redistribution and economic growth......Page 32
Inflation tax and economic growth......Page 33
The Mundell model......Page 35
Inflationary finance and the danger of hyperinflation......Page 36
FINANCE AND ECONOMIC GROWTH......Page 37
The McKinnon model of finance in economic development......Page 38
Critique of the financial liberalisation hypothesis17......Page 40
SUMMARY AND CONCLUSION......Page 43
NOTES......Page 44
INFLATION AND ECONOMIC GROWTH......Page 47
Inflation causing growth......Page 50
Economic growth causing inflation......Page 52
FINANCIAL CONDITIONS AND ECONOMIC GROWTH......Page 53
Real deposit interest rates and savings......Page 55
Real interest rate and financial deepening......Page 56
Real interest rates and efficiency of investment......Page 57
Financial deepening and economic growth......Page 58
The real interest rate and economic growth......Page 59
SUMMARY AND CONCLUSION......Page 60
NOTES......Page 61
4 ISSUES IN FINANCIAL LIBERALISATION REFORM......Page 62
FACTORS BEHIND FINANCIAL REFORMS IN DEVELOPING COUNTRIES......Page 63
FINANCIAL SECTOR REFORM AND FINANCIAL CRISIS......Page 64
Latin American ‘Southern Cone’ countries......Page 65
Argentina......Page 66
Chile......Page 67
Uruguay......Page 69
Asian developing countries......Page 70
Taiwan......Page 71
South Korea......Page 72
Indonesia......Page 73
Malaysia......Page 75
The Philippines......Page 76
Sri Lanka......Page 77
Turkey......Page 78
African countries......Page 79
WHAT ARE THE LESSONS?8......Page 80
Inflation tax replacement......Page 81
Financial repression: a source of government revenue......Page 82
The order of liberalisation of the external sector......Page 83
Prudential regulation and supervision......Page 85
Political sustainability of economic reform......Page 87
SUMMARY AND CONCLUSION......Page 88
NOTES......Page 89
MONETARIST-KEYNESIAN DEBATE ON STABILISATION1......Page 92
DEMAND SHOCK AND STABILISATION IN DEVELOPING COUNTRIES......Page 93
Sources and pattern of economic instability......Page 94
Sensitivity of economy to demand shocks......Page 96
Flexibility of wages, interest and exchange rates......Page 97
Agricultural supply shocks and inflation......Page 100
An aggregate demand function......Page 101
An application of the model in a closed economy......Page 102
Supply shock and inflation under the fixed exchange rate system......Page 104
Supply shock and inflation under the flexible exchange rate system......Page 105
SUMMARY AND CONCLUSION......Page 107
APPENDIX. CROP FAILURE AND INFLATION: THE CASE OF BANGLADESH......Page 108
NOTES......Page 109
A MONEY MULTIPLIER MODEL OF THE MONEY SUPPLY PROCESS......Page 112
BUDGET DEFICITS AND MONEY SUPPLY IN DEVELOPING COUNTRIES......Page 115
MONETARY CONTROL IN A FINANCIALLY REPRESSED ECONOMY......Page 117
MONETARY CONTROL IN A FINANCIALLY LIBERALISED ECONOMY......Page 120
EXCHANGE RATE REGIMES AND IMPLICATIONS FOR MONETARY POLICY......Page 122
Kenya......Page 124
Bangladesh......Page 125
Malaysia......Page 126
Indonesia......Page 127
South Korea......Page 128
Hong Kong......Page 129
SUMMARY AND CONCLUSION......Page 130
NOTES......Page 131
THE TRANSMISSION MECHANISM......Page 133
MONETARY POLICY IN A REPRESSED ECONOMY......Page 136
THE DEMAND FOR MONEY......Page 138
Specification of a long-run money demand function......Page 139
Specification of a short run money demand function......Page 140
The empirical evidence......Page 141
FINANCIAL LIBERALISATION AND THE DEMAND FOR MONEY......Page 143
CURRENCY SUBSTITUTION AND THE DEMAND FOR MONEY......Page 144
SUMMARY AND CONCLUSION......Page 145
NOTES......Page 146
8 MONEY, CREDIT, BALANCE OF PAYMENTS AND INFLATION......Page 148
The credit growth rule and the balance of payments......Page 149
BALANCE OF PAYMENTS DEFICITS AND IMF CONDITIONALLY......Page 150
Experience of developing countries with IMF stabilisation programmes......Page 151
A model of balance of payments crises......Page 153
Implications of the balance of payments crisis......Page 154
A traded-non-traded goods model of inflation under a fixed exchange rate......Page 156
Adjustment of disequilibrium in the money market......Page 158
Intertemporal equilibrium inflation in developing economies......Page 159
CHOICE OF EXCHANGE RATE REGIMES FOR DEVELOPING COUNTRIES......Page 160
NOTES......Page 162
9 FINANCIAL STABILITY, MONETARY DISCIPLINE AND INSTITUTIONS......Page 164
INSTITUTIONAL ARRANGEMENTS FOR THE FINANCIAL MARKET......Page 165
INSTITUTIONAL FRAMEWORK AND MONETARY POLICY CREDIBILITY......Page 166
OPENNESS AND MONETARY AND FINANCIAL STABILITY......Page 167
NOTES......Page 168
BIBLIOGRAPHY......Page 169
NAME INDEX......Page 186
SUBJECT INDEX......Page 189