Publication Date
June 2005
Recommended Citation
Shrestha, M. B. and Chowdhury, K., ARDL Modelling Approach to Testing the Financial Liberalisation Hypothesis, Department of Economics, University of Wollongong, 2005.
https://ro.uow.edu.au/commwkpapers/121
Abstract
It is a stylised fact that financial “repression” retards economic growth. Hence, financial liberalisation is advocated to remove the stranglehold on the economy. Financial liberalisation policy argues that deregulation of interest rate would result into a higher real interest rate which would lead to increased savings, increased investment and achieve efficiency in financial resource allocation. Past studies have reported inconclusive results regarding the interest rate effects on savings and investment. This paper examines the financial liberalisation hypothesis by employing autoregressive distributed lag (ARDL) modelling approach on Nepalese data. Results show that the real interest rate affects both savings and investment positively.
Publication Details
Shrestha, MB and Chowdhury, K, ARDL Modelling Approach to Testing the Financial Liberalisation Hypothesis, Working Paper 05-15, Department of Economics, University of Wollongong, 2005.