Monetary and Financial Policies in Developing Countries: Growth and Stabilization

by Chowdhury,Anis

• ISBN13: 9780415108706
• ISBN10: 0415108705
• Edition: 1st
• Format: Hardcover
• Copyright: 1996-03-27
• Publisher: Routledge

Summary

The issue of economic development and monetary stability has produced one of the most passionate debates in economic literature. The authors bring together diverse views on the subject within a coherent framework, some of the aspects discussed include a balanced assessment of empirical findings and their theoretical foundations on the role of money and growth; a discussion of financial liberalization reform in developing countries; an analysis of monetary policy as an instrument of economic stabilization; an examination of the monetary supply and demand process in developing countries; and a study of the relationship between money, credit, the balance of payments, inflation and the exchange rate system.

Table of Contents

Illustrations	vii	(2)
Preface	ix
1 INTRODUCTION	1	(15)
Taming business cycles: the role of monetary policy in the short run	2	(3)
Promoting economic growth: the role of monetary policy in the long run	5	(4)
Plan of the book	9	(7)
2 MONEY AND FINANCE IN ECONOMIC GROWTH: A THEORETICAL REVIEW	16	(29)
Money and economic growth	17	(8)
Monetary expansion, inflation and economic growth	25	(7)
Finance and economic growth	32	(8)
Summary and conclusion	40	(5)
3 MONEY AND FINANCE IN ECONOMIC GROWTH: A REVIEW OF EMPIRICAL EVIDENCE	45	(20)
Inflation and economic growth	45	(9)
Financial conditions and economic growth	54	(8)
A case for mild financial repression	62	(1)
Summary and conclusion	63	(2)
4 ISSUES IN FINANCIAL LIBERALISATION REFORM	65	(36)
Factors behind financial reforms in developing countries	66	(1)
Financial sector reform and financial crisis	67	(2)
Experience with financial reform in developing countries	69	(8)
What are the lessons?	87	(10)
Summary and conclusion	97	(4)
5 MONETARY POLICY AS A TOOL OF ECONOMIC STABILISATION	101	(25)
Monetarist-Keynesian debate on stabilisation	102	(1)
Demand shock and stabilisation in developing countries	103	(8)
Supply shocks and inflation: the role of monetary policy	111	(9)
Summary and conclusion	120	(1)
Appendix. Crop failure and inflation: the case of Bangladesh	121	(5)
6 MONEY SUPPLY AND THE CONDUCT OF MONETARY POLICY	126	(28)
A money multiplier model of the money supply process	127	(3)
Budget deficits and money supply in developing countries	130	(3)
Monetary control in a financially repressed economy	133	(4)
Monetary control in a financially liberalised economy	137	(2)
Exchange rate regimes and implications for monetary policy	139	(2)
Monetary policy in selected developing countries	141	(10)
Summary and conclusion	151	(3)
7 DEMAND FOR MONEY AND THE RELIABILITY OF MONETARY POLICY	154	(20)
The transmission mechanism	155	(3)
Monetary policy in a repressed economy	158	(3)
The demand for money	161	(6)
Financial liberalisation and the demand for money	167	(2)
Currency substitution and the demand for money	169	(1)
Summary and conclusion	170	(4)
8 MONEY, CREDIT, BALANCE OF PAYMENTS AND INFLATION	174	(21)
Central bank credit and the balance of payments	175	(2)
Balance of payments deficits and IMF conditionality	177	(4)
Budget deficits, foreign reserves and exchange rate regimes	181	(3)
Central bank credit, inflation and exchange rate regimes	184	(7)
Choice of exchange rate regimes for developing countries	191	(2)
Summary and conclusion	193	(2)
9 FINANCIAL STABILITY, MONETARY DISCIPLINE AND INSTITUTIONS	195	(7)
Institutional arrangements for the financial market	196	(2)
Institutional framework and monetary policy credibility	198	(2)
Openness and monetary and financial stability	200	(1)
Summary and conclusion	200	(2)
Bibliography	202	(20)
Name index	222	(3)
Subject index	225