Advertisement

Some Warnings Concerning Possible Financial Reform in the Dominican Republic

  • Andres Dauhajre

Abstract

One of the recommendations international financial institutions, particularly the International Monetary Fund and the World Bank, often make to less developed countries with severe balance of payments disequilibria, is to increase the rate of interest on time deposits. The experts who work at these agencies, and the technical missions who visit these countries, adopt the theoretical frameworks of McKinnon (1973), Shaw (1973) and Kapur (1976), and consider that the increase in the rate of interest on time deposits will raise the economy’s level of savings. This would enlarge the real size of the banking system and, consequently, the net banking credit flow necessary to finance investment.

Keywords

Exchange Rate Interest Rate Dominican Republic Money Demand Nominal Interest Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Dauhajre, Andres, Dual Exchange Rate Dynamics with Incomplete Segmentation and Rational Expectations unpublished PhD dissertation (New York: Columbia University, 1983.Google Scholar
  2. Kapur, Basant, ‘Alternative Stabilisation Policies in Economic Development,’ Journal of Political Economy, Vol. 84, No. 4, part 1, 1976.Google Scholar
  3. McKinnon, Ronald, Money and Capital in Economic Development ( Washington, DC: Brookings Institution, 1973 ).Google Scholar
  4. Shaw, Edward, Financial Deepening in Economic Development ( Oxford: Oxford University Press, 1973 ).Google Scholar
  5. Wijnbergen, S. van, ‘Interest Rate Management in LDC’s’, Journal of Monetary EconomicsVol. c, No. 3, 1983.Google Scholar

Copyright information

© Antonio Jorge and Jorge Salazar-Carrillo 1988

Authors and Affiliations

  • Andres Dauhajre

There are no affiliations available

Personalised recommendations