Investment spending and interest rate policy: The case of financial liberalisation in Turkey

Rittenberg, Libby

doi:10.1080/00220389108422190

Cited by 27 publications

(12 citation statements)

References 6 publications

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“…Akyüz attributes the low savings rates to a redistribution of income from the high savings rate groups (corporate income earners) to low savings rate groups (rentier income) [1]. Rittenberg supports that assumption by emphasizing the shaken public confidence following the bankruptcy of the major brokerage houses during this period [31]. After 1986, the ratio of private savings to GNP which increased sharply from an average of 10.5 per cent during the 1981-86 period to an average of 19.8 per cent during the 1987-93 period cannot be attributed to the real interest rates which changed from 9.4 per cent to 7.2 per cent respectively.…”

Section: Resultsmentioning

confidence: 69%

Differences in Household Savings Behavior: Evidence From Industrial and Developing Countries

Muradoğlu¹,

Taskin²

1996

The Developing Economies

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Section: Resultsmentioning

confidence: 69%

Differences in Household Savings Behavior: Evidence From Industrial and Developing Countries

Muradoğlu¹,

Taskin²

1996

The Developing Economies

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“…In other cases, either the effect was negative or the real rate of interest has no effect. [24] suggests that investment, through savings, will be positively correlated with below-equilibrium interest rates and negatively correlated with above-equilibrium rates; [25] find a negative relationship between real interest rates and investment; and [26] indicated that real interest rates have no significant impact on investment. In line with findings such as Gelb's, a number of empirical studies on investment in least-developed countries (LDCs) excluded interest rates from the regressions [27] [28].…”

Section: Empirical Review Of Literaturementioning

confidence: 99%

Determinants of Bank Deposits in Ghana: Does Interest Rate Liberalization Matters?

Boadi¹,

Li²,

Lartey³

2015

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This research paper examines the effect of interest rate liberalization on bank deposits in a developing country Ghana. A deposit function model was specified with long term deposit as the main dependent variable with real savings rate, real treasury bill rate, exchange rate movement and gross domestic product as independent variables while controlling for inflation. Ordinary Least Squares (OLS) method was used to estimate the specified model which covered seasonally adjusted quarterly data drawn from Bank of Ghana and Ghana Statistical Service. The data were input into a spreadsheet and exported into Econometric View 7 which was used for processing the data. The results of the study revealed that the interest rate liberalization and gross domestic product jointly accounted for about 78% of the variation in the level of bank savings deposits in Ghana. The study has also shown that the liberalization of the interest rates has made it attractive for people with idle funds to save with financial institutions especially the banks. It also revealed a negative relationship between real savings rate and the real treasury bill rate expected in a high inflationary environment. All the independent variables were significant. It is therefore recommended that the Bank of Ghana remains resilience on interest rate liberalization so that surplus funds can be made available for investors and also to reduce the level of inflation in Ghana.

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“…Using a sample of 34 countries over the 1965-1985period, Gelb (1989 provides cross-section evidence indicating that real interest rates foster growth not primarily through increasing the quantity of investment. Laumas (1990) finds a positive relationship between private investment and the real interest rate for India over the period 1954-1975. Rittenberg (1991 makes an interesting contribution to the literature with a study about Turkey over the 1964-1986 period.…”

Section: Financial Liberalization Savings and Investmentmentioning

confidence: 99%

Finance and Growth: A Survey of the Theoretical and Empirical Literature

Eschenbach

2004

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in NON-TECHNICAL SUMMARYIn this paper we review the theoretical and empirical literature on links between domestic financial development and economic growth.In the 1960s early pioneers like Goldsmith, Cameron, and Gerschenkron used crude econometric methods and case studies to explore the finance-growth nexus. They found rough associations between financial factors and output, but did not provide a strong enough theoretical fundament to answer the causality question.In the 1970s McKinnon and Shaw developed a theoretical framework that helped to explain growth-inducing effects of financial liberalization in contrast to financial repression.They argued that the financial sector could raise the volume of savings as well as the quantity and quality of investment. This approach found only mixed empirical support and could not explain sustained increases in the growth rate of an economy either.The literature of the 1980s witnessed a return towards market critical approaches that were based on micro (market failure related) -and macroeconomic (neostructuralist) concerns.Mixed experiences with financial liberalization policies fuelled the surge in this type of literature.The answer economic theory gave to these q uestions was incorporated in the endogenous growth literature of the 1990s. It emphasizes the role of financial development in generating sustained growth through an external effect on aggregate investment efficiency. Some authors have developed a framework for reciprocal externalities between the financial and the real sector. Much empirical support has been found for the "finance promotes growth" view, but time-series evidence is less clear-cut than broad cross-section analysis. A majority of studies, however, comes to the conclusion that finance induces growth in early stages of economic development and vice versa in more advanced stages. A lot of evidence for bi-directional causality has been found as well. A specific role has been attributed to stock markets, but here in particular, the evidence is mixed.1

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Investment spending and interest rate policy: The case of financial liberalisation in Turkey

Cited by 27 publications

References 6 publications

Differences in Household Savings Behavior: Evidence From Industrial and Developing Countries

Differences in Household Savings Behavior: Evidence From Industrial and Developing Countries

Determinants of Bank Deposits in Ghana: Does Interest Rate Liberalization Matters?

Finance and Growth: A Survey of the Theoretical and Empirical Literature

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