Non-Credit Money to Fight Poverty

  • Biagio Bossone
  • Abdourahmane Saw

Abstract

While finance plays an important role in supporting economic growth, financial institutions have a limited reach in low income countries. This is because underdeveloped financial infrastructures, inadequate collateral, weak contract enforcement, and low participation in payments systems expose banks to high liquidity and credit risks. Circuit analysis shows how banks enable a monetary production economy to function and grow by creating and allocating money through lending to support demand and production. When lending is hindered by structural impediments, economic growth is constrained.

Keywords

Income Expense Stake 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Berthelémy, J.C. and Varoudakis, A. (1996) Financial Development Policy and Growth, Development Centre Studies, Long-Term Growth Series (Paris: Organisation for Economic Co-operation and Development).Google Scholar
  2. Bossone, B., Mahajan, S. and Zahir, F. (2003) ‘Financial Infrastructure, Group Interests, and Capital Accumulation’, IMF Working Paper 03/24 (Washington: International Monetary Fund).Google Scholar
  3. Bossone, B. (2003) ‘Thinking of the Economy as a Circuit’, in L.-P. Rochon and S. Rossi (eds), Modern Theories of Money. The Nature and Role of Money in Capitalist Economies (Northampton: Edward Elgar), pp. 142–72.Google Scholar
  4. Bossone, B. and Sarr, A. (2002) ‘A New Financial System for Poverty Reduction and Growth’, IMF Working Paper 02/178 (Washington: International Monetary Fund).Google Scholar
  5. Freeman, S. (1996) ‘Clearing House Banks and Banknote Over-Issue’, Journal of Monetary Economics, 38, pp. 101–15.CrossRefGoogle Scholar
  6. Kahn, M.S. and Senhadji, A.S. (2000) ‘Financial Development and Economic Growth: An Overview’, IMF Working Paper 00/209 (Washington: International Monetary Fund).Google Scholar
  7. Stiglitz, J.E. and Weiss, A. (1981) ‘Credit Rationing in Markets With Imperfect Information’, America Economic Review, 71, pp. 393–410.Google Scholar

Copyright information

© Biagio Bossone and Abdourahmane Sarr 2005

Authors and Affiliations

  • Biagio Bossone
  • Abdourahmane Saw

There are no affiliations available

Personalised recommendations