Year of Graduation
Financial Repression and Economic Growth
The purpose of this paper is to determine the effect of financial repression on economic growth. It will be done with the extension of classical model of Roubini, Sala-i-Martin (1992) with government debt: households will be required to invest a certain proportion of their productive capital in government bonds with interest rate that is lower than market one after tax. This paper is expected to prove a negative impact of financial repression and show how financial repression works alongside with money market.