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Financial Repression and Economic Growth: Empirical Evidence
This paper examines an analysis of the relation between financial repression policy and economic growth. It presents a financial repression index, which reflect the intensity of financial repression measures used in the government policy. The index includes a quantitative assessment of the most popular instruments which were used during the last fifteen years. Next, it presents the empirical evidence between measures of financial repression and growth in the two cross-section group of countries: developed and developing. The paper confirms theory and shows using controlling variables that policies of financial repression reduce the growth rate of the economy in both groups of the countries. Also it presents that inclusion of financial repression index as an explanatory variable is statistically significant and can be interpreted intuitively.