Financial Repression and the Liberalisation Problem within Less-Developed Countries

  • Ronald Mckinnon
  • Sven Grassman


In less-developed countries, open markets for common stocks, bonds, mortgages, or even commercial bills are insignificant. This does not constitute a ‘distortion’, but merely reflects low per capita income and the resulting small scale of individual acts of saving and investment. Information is insufficient to have small farmers or merchants issue their own notes or shares that are publicly traded.


Central Bank Banking System Commercial Bank Saving Bank Nominal Rate 
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Copyright information

© Sven Grassman and Erik Lundberg 1981

Authors and Affiliations

  • Ronald Mckinnon
    • 1
  • Sven Grassman
    • 2
  1. 1.USA
  2. 2.Sweden

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