Unorganized Money Markets and 'Unproductive' Assets in the New Structuralist Critique of Financial Liberalization

The new structuralists' critique of financial liberalization emphasizes the role of informal credit markets in financing firms' residual credit demand in LDCs and the relevance of households' portfolio substitution patterns. The sensitivity of their policy conclusions is demonstrated in the context of a representative model developed by van Wijnbergen; the relative efficiency of intermediation in the formal and informal credit markets crucially affects the outcome of the portfolio allocation effects generated by higher bank deposit rates. An anomaly in the characterization of 'unproductive' assets in defining credit supply is also examined.


Issue Date:
Nov 11 1988
Publication Type:
Working or Discussion Paper
Language:
English
Total Pages:
26
Series Statement:
8810




 Record created 2017-09-11, last modified 2017-09-11

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