Nkusu, Mwanza.
Interest Rates, Credit Rationing, and Investment in Developing Countries Mwanza Nkusu. [electronic resource] / Mwanza Nkusu. - Washington, D.C. : International Monetary Fund, 2003. - 1 online resource (31 p.) - IMF Working Papers; Working Paper ; No. 03/63 . - IMF Working Papers; Working Paper ; No. 03/63 .
This paper examines the impact of interest rates and inflation on bank loans and investment within a framework that mimics the financial sectors prevailing in most low-income developing countries. The paper emphasizes the importance of treating the lending and deposit rates of interest as distinct parameters in investment equations. The spread between the two rates is indicative of default risk and has a negative impact on incremental loan amounts associated with higher lending rates, in particular in economies with flawed institutions. The model presented in the paper highlights the importance of promoting macroeconomic stability and upgrading institutions and informational infrastructure.
1451848447 : 15.00 USD
1018-5941
10.5089/9781451848441.001 doi
Bank Credit
Bank Loans
Banking
Financial Markets and the Macroeconomy
Fiscal and Monetary Policy in Development
Inflation
Malawi
Tanzania
United States
Zimbabwe
Interest Rates, Credit Rationing, and Investment in Developing Countries Mwanza Nkusu. [electronic resource] / Mwanza Nkusu. - Washington, D.C. : International Monetary Fund, 2003. - 1 online resource (31 p.) - IMF Working Papers; Working Paper ; No. 03/63 . - IMF Working Papers; Working Paper ; No. 03/63 .
This paper examines the impact of interest rates and inflation on bank loans and investment within a framework that mimics the financial sectors prevailing in most low-income developing countries. The paper emphasizes the importance of treating the lending and deposit rates of interest as distinct parameters in investment equations. The spread between the two rates is indicative of default risk and has a negative impact on incremental loan amounts associated with higher lending rates, in particular in economies with flawed institutions. The model presented in the paper highlights the importance of promoting macroeconomic stability and upgrading institutions and informational infrastructure.
1451848447 : 15.00 USD
1018-5941
10.5089/9781451848441.001 doi
Bank Credit
Bank Loans
Banking
Financial Markets and the Macroeconomy
Fiscal and Monetary Policy in Development
Inflation
Malawi
Tanzania
United States
Zimbabwe