The puzzle of persistently negative interest rate-growth differentials : financial repression or income catch-up? /

The puzzle of persistently negative interest rate-growth differentials : financial repression or income catch-up? /

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Bibliographic Details
Author / Creator:Escolano, Julio, author.
Imprint:[Washington, D.C.] : International Monetary Fund, ©2011.
Description:1 online resource (30 pages) : illustrations
Language:English
Series:IMF working paper ; WP/11/260
IMF working paper ; WP/11/260.
Subject:
Interest rates -- Econometric models.
Economic development -- Econometric models.
Economic development -- Econometric models.
Interest rates -- Econometric models.
Electronic books.
Format: E-Resource Book
URL for this record:http://pi.lib.uchicago.edu/1001/cat/bib/13510761
Hidden Bibliographic Details
Other authors / contributors:Shabunina, Anna, author.
Woo, Jaejoon, author.
International Monetary Fund. Fiscal Affairs Department, issuing body.
ISBN:1283557754
9781283557757
9781463942908
1463942907
1463984898
9781463984892
1463975708
9781463975708
9786613870209
661387020X
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.
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.
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
Standard no.:10.5089/9781463984892.001
Table of Contents:
  • Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Interest rate-growth differentials and income; 1. Summary Statistics on Interest Rate Growth Differentials; 1. Interest Rate-Growth Differential: 1999-2008 average1; 2. Interest Rate-Growth Differential: Non-Advanced Economies, 1999-2008; 2. Average by Country Groupings: Within-Country Volatility and Persistence of Interest Rate Growth Differentials; III. The puzzling behavior of the IRGD in developing economies; 3. IRGD in Non-Advanced Economies Relative to G-7 Average, and Its Components.
  • IV. Why are interest rates so low in EMEs?4. Real Interest Rates: 1999-2008 average1; 5. Real Interest Rates and Volatility: 1999-2008 average1; 6. Real Interest Rates and Non-Advanced Economies and EMBI Spread; 7. Real Interest Rates and Inflation: 1999-2008 average1; 8. Real Interest Rates and Financial Development: 1999-2008 average1; 9. Korea: Real Interest Rates and Private Credit1; 10. South Africa: Real Interest Rates and Private Credit1; V. Econometric testing of the financial distortions hypothesis; 3. Panel Regression: Real Effective Interest Rates and Financial Repression.
  • 4. Panel Regression: Real Effective Interest Rates and Financial Repression -Excluding the Episodes of High InflationVI. Conclusions; 1. Derivation of Interest Rate-Growth Differential; 2. Financial Crises and Dynamics of the IRGD; References; Footnotes.

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