{
  "title": "Identifying Constraints to Financial Inclusion and Their Impact on GDP and Inequality: A Structural Framework for Policy",
  "publication": "IMF Working Papers, January 27, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/identifying-constraints-to-financial-inclusion-and-their-impact-on-gdp-and-inequality-a-42649",
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  "summary": "We develop a micro-founded general equilibrium model with heterogeneous agents to identify pertinent constraints to financial inclusion. We evaluate quantitatively the policy impacts of relaxing each of these constraints separately, and in combination, on GDP and inequality.",
  "sections": [
    {
      "heading": "Model and Methodology",
      "content": "- Develops a micro-founded general equilibrium model with heterogeneous agents to identify pertinent constraints to financial inclusion.\n- Evaluates quantitatively the policy impacts of relaxing each constraint separately, and in combination, on GDP and inequality.\n- Focuses on three dimensions of financial inclusion:\n  - Access (determined by the size of participation costs).\n  - Depth (determined by the size of collateral constraints resulting from limited commitment).\n  - Intermediation efficiency (determined by the size of interest rate spreads and default possibilities due to costly monitoring).\n- Takes the model to firm-level data from the World Bank Enterprise Survey."
    },
    {
      "heading": "Data, Countries, and Scope",
      "content": "- Six countries at varying degrees of economic development:\n  - Three low-income countries: Uganda, Kenya, Mozambique.\n  - Three emerging market countries: Malaysia, the Philippines, and Egypt.\n- Uses firm-level data from the World Bank Enterprise Survey."
    },
    {
      "heading": "Key Findings",
      "content": "- Alleviating different financial frictions has a differential impact across countries.\n- Country-specific characteristics play a central role in determining the linkages and tradeoffs between inclusion, GDP, inequality, and the distribution of gains and losses."
    },
    {
      "heading": "Policy Implications and Evaluation",
      "content": "- Quantitative evaluation of policy impacts for relaxing:\n  - Participation cost constraints (access).\n  - Collateral constraints from limited commitment (depth).\n  - Intermediation inefficiencies related to interest rate spreads and costly monitoring (intermediation efficiency).\n- Analyses imply tradeoffs between expanding financial inclusion and effects on GDP and inequality vary by country; policy design should account for country-specific characteristics.\n\n---\n\n Content in this bundle\n\n- wp1522\n  - wp1522 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1522 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/identifying-constraints-to-financial-inclusion-and-their-impact-on-gdp-and-inequality-a-42649"
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    "Authors: Era Dabla-Norris, Yan Ji, Robert M. Townsend, Filiz D Unsal",
    "Published: January 27, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781498381598.001",
    "Develops a micro-founded general equilibrium model with heterogeneous agents to identify pertinent constraints to financial inclusion.",
    "Evaluates quantitatively the policy impacts of relaxing each constraint separately, and in combination, on GDP and inequality.",
    "Focuses on three dimensions of financial inclusion:",
    "Takes the model to firm-level data from the World Bank Enterprise Survey.",
    "Six countries at varying degrees of economic development:",
    "Uses firm-level data from the World Bank Enterprise Survey.",
    "Alleviating different financial frictions has a differential impact across countries.",
    "Country-specific characteristics play a central role in determining the linkages and tradeoffs between inclusion, GDP, inequality, and the distribution of gains and losses.",
    "Quantitative evaluation of policy impacts for relaxing:",
    "Analyses imply tradeoffs between expanding financial inclusion and effects on GDP and inequality vary by country; policy design should account for country-specific characteristics.",
    "**_wp1522**"
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