Financial Liberalization and Investment

What happens to savings, investment, income and growth if governments allow interest rates to be determined by market forces? This work attempts to answer this question by examining financial deregulation, focusing specifically on its consequences for the real sectors of the economy.
For two decades thinking on economic policy has been dominated by the idea of economic liberalization in general and financial deregulation in particular. This field has become both extensive and controversial, yet there is no single book which treats financial deregulation in a complete and coherent manner.
This book rectifies the shortfall by focusing specifically on the consequences of interest rate deregulation for the real sectors of the economy. Using both analytical and simulation models the behaviour of consumers, firms, banks, informal credit markets and governments is examined with a view to providing guidance on a number of controversial issues.