Financial Indicators and Financial Change in Africa and Asia
November 1, 1995
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Summary
Deregulation of the financial system often proceeds in tandem with macroeconomic stabilization centered on monetary and other financial targets. This paper presents a model where there may be conflict between these processes. The indicator properties of some financial variables may be rendered unstable by the liberalization process. However, other, carefully selected financial aggregates may contain information about economic activity that is useful to policy makers during stabilization. Data from a group of selected African and Asian countries is examined. These are broadly consistent with the predictions of the model, while highlighting the importance of macroeconomic and financial stability for the success of financial reforms.
Subject: Bank credit, Banking, Commercial banks, Credit, Economic sectors, Financial institutions, Financial sector, Financial services, Money, Real interest rates
Keywords: Africa, Asia and Pacific, Bank credit, broad money, Commercial banks, Credit, data sample, exchange rate, financial liberalization, Financial sector, financial system, liberalization process, liberalization program, narrow money, post liberalization period, private sector, Real interest rates, WP
Pages:
54
Volume:
1995
DOI:
Issue:
123
Series:
Working Paper No. 1995/123
Stock No:
WPIEA1231995
ISBN:
9781451854558
ISSN:
1018-5941
