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- W2970521234 abstract "This paper first investigates whether any meaningful financial liberalization has taken place in China since economic reforms began in 1978. An index of financial repression is constructed for this purpose. It shows that apart from official economic austerity programs in 1985, 1989-1991 and 1994, a steady decline in financial repression has eventuated. The paper then investigates whether this financial liberalization has contributed to financial deepening as the Mckinnon-Shaw hypothesis suggests should be the case. An econometric autoregressive distributed lag model(ADL) is estimated to shed light on this issue. Financial depth is modeled as a function of real GDP per capita, the real interest rate, financial institution density and our financial repression index. The results show that over the period 1978-1996, financial depth has been strongly influenced by real GDP per capita and the real interest rate. An error correction model(ECM) derived from the ADL model reveals that the real rate of interest is a particularly important factor in explaining short run fluctuations in financial depth. The results are therefore generally supportive of the McKinnon-Shaw hypotesis." @default.
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- W2970521234 date "1998-12-01" @default.
- W2970521234 modified "2023-09-23" @default.
- W2970521234 title "Financial liberalization and financial depth in China" @default.
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