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FINANCIAL LIBERALIZATION AND ECONOMIC GROWTH: A THEORETICAL ANALYSIS OF THE TRANSFORMING CHINESE ECONOMY
Author(s) -
Fung Michael K. Y.,
Ho WaiMing,
Zhu Lijing
Publication year - 2005
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.2005.00264.x
Subject(s) - financial repression , economics , commodity , liberalization , dual (grammatical number) , portfolio , financial market , state (computer science) , transaction cost , database transaction , bond market , monetary economics , macroeconomics , financial system , finance , market economy , interest rate , art , programming language , literature , algorithm , computer science
. We conduct a theoretical investigation into how financial reforms are affecting the long‐run economic performance of the partially reformed Chinese economy. In a model with a dual structure in commodity production and financial repression, allowing the co‐existence of a state banking system and an informal credit market and introducing heterogeneity in the transaction technologies of individuals, we examine the interactions between the state banking system and the informal credit market, and the effects of various measures of financial liberalization on individuals’ optimal portfolio choices and the macroeconomic aggregates.