Financial deregulation in developing countries : the case of Malawi

Chisiano, Gertrude Happiness Mlachila. (1993). Financial deregulation in developing countries : the case of Malawi Master's Thesis, School of Economics, University of Queensland.

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Author Chisiano, Gertrude Happiness Mlachila.
Thesis Title Financial deregulation in developing countries : the case of Malawi
School, Centre or Institute School of Economics
Institution University of Queensland
Publication date 1993
Thesis type Master's Thesis
Total pages 68
Language eng
Subjects 14 Economics
Formatted abstract
The deregulation of financial markets has been a widespread phenomenon in developing countries in the past two decades. Monetary control in many developing countries has typically involved direct controls on interest rates, credit ceilings, high reserve and liquid asset requirements. Direct controls lead to an underdeveloped, uncompetitive financial market dominated by a few banks.

In a deregulated financial environment, greater emphasis is on market-based instruments of monetary policy rather than direct controls. Financial reforms are aimed at eliminating credit controls and achieving positive real interest rates on bank deposits and loans to stimulate investment and attract foreign capital.

This study employs the savings-investment model developed by Feldstein and Horioka (1980) to measure capital mobility and the relationship between savings and investment in a deregulated financial system. The empirical analysis has been done by using time-series data for the sample period 1970 to 1992. The results reveal that there is no correlation between domestic savings and investment and supports the hypothesis that there is a considerable degree of capital mobility. Controls on capital have not been effective in Malawi and as such there is no need to maintain these controls.

Document type: Thesis
Collection: UQ Theses (non-RHD) - UQ staff and students only
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Created: Thu, 21 Oct 2010, 09:40:09 EST by Ning Jing on behalf of The University of Queensland Library