This paper develops a simulation model to assess the consequences of government's trying to raise revenues through financial repression in developing countries. The measures of financial repression studied are (1) government borrowing from the banking sector to finance its budget deficit (2) government borrowing from the banks at lower rates and (3) the government levying a tax on interest income from government bonds. The policies appear to be detrimental to private capital formation, while the effect on government expenditures is repression-measure specific. (C) 1997 Society for Policy Modeling. Published by Elsevier Science Inc.
|Number of pages||23|
|Journal||Journal of Policy Modeling|
|Publication status||Published - Aug-1997|
- financial repression
- simulation model
- developing countries