Hidden Bibliographic Details
| Other authors / contributors: | Shabunina, Anna, author.
Woo, Jaejoon, author.
International Monetary Fund. Fiscal Affairs Department, issuing body.
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| ISBN: | 1283557754
9781283557757
9781463942908
1463942907
1463984898
9781463984892
1463975708
9781463975708
9786613870209
661387020X
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| Notes: | At head of title: Fiscal Affairs Department.
Title from PDF title page (IMF Web site, viewed November 28. 2011).
"November 2011."
Includes bibliographical references.
English.
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| Summary: | 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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| Other form: | Print version: Shabunina, Anna. Puzzle of Persistently Negative Interest Rate-Growth Differentials: Financial Repression or Income Catch-Up? Washington : International Monetary Fund, ©2011 9781463924553
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| Standard no.: | 10.5089/9781463984892.001
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