تلخیص
As in many other less developed countries, policy makers in Pakistan have accepted a series of neo-liberal reforms. Included among these are financial sector reforms such as interest rate liberalization.. We demonstrate in this paper that there is very weak support at best for the neo-liberal hypotheses concerning financial liberalization and that such liberalization is regressive. McKinnon, (1973); and Shaw, (1973); were the major advocates of financial reform. They argued that financial repression in the form of controlled, and hence often negative, real interest rates reduced incentives for saving and hindered financial intermediation. liberalizing and allowing positive market driven interest rates would channel funds from consumption, cash holdings, less productive self-investment, and overly capital intensive investments to more productive invest-ments. I)isputing this contention, neo-structuralists have argued that following finan-cial liberalization, the funds would be drawn from the informal credit markets (kerb markets), which are actually more efficient at intermediating funds because there are fewer leakages and no reserve requirements? Given the lack of data on intermedia-tion in the informal sector and responses following bouts of liberal i zati on, the debate is potentially difficult to resolve. However, Cho, (1990) has disputed the validity of the neo-structuralist arguments on a conceptual level.
Shahrukh Rafi Khan, Safiya Aftab. (1994) ASSESSING THE IMPACT OF FINANCIAL REFORMS ON PAKISTAN’S ECONOMY, Pakistan Journal of Applied Economics, Volume-10, Issue-1.
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