The previous two chapters concentrated on the adjusting mechanisms that brought equilibrium to the accumulation balances for all the economic agents. These discussions demonstrated that the adjusting rules tended to be essentially different for each agent, and that the adjustment mechanisms tended to vary from period to period in response to external shocks and to changes in domestic policy. However, in order to have a full and coherent version of the whole economy, we still need to analyse and specify adjustment for the financial sector balance; this is carried out in this chapter.
KeywordsInterest Rate Banking System Commercial Bank Real Interest Rate Real Term
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