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Saving and real interest rates in developing countries

By Carmen Reinhart and Jonathan Ostry

Abstract

Raising real interest rates has been cited as a way to increase private saving,and thus provide the resources for growth. But this may not be a viable approach in the poorest developing countries in which most people live at subsistence level. In these situations, consumption is not very responsive to fluctuations in real interest rates and financial liberalization my not be the catalyst to higher higher saving rates.

Topics: O1 - Economic Development, D11 - Consumer Economics: Theory, D12 - Consumer Economics: Empirical Analysis
Year: 1995
DOI identifier: 10.5089/9781451852318.001
OAI identifier: oai:mpra.ub.uni-muenchen.de:13352

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