Using Overlapping Generations Model for studying the impact of Intervention in Financial sector on Economical Growth


Abstract in English

Many studies showed that interventionist policies play negative role on the economical growth process. Others, based on realistic statistics related to some countries, showed that some of this politics can play positive role on the economical growth of these countries. In this course, this study aimed to stand on the role that the interventional polices may play on the economical growth using real mathematical model that is The Overlapping Generations Model where a study of probable effect of these policies on individual saving level took place. Results show that interventionist policies affect negatively on investment level accordingly capital stock accumulation on the long term. But in the countries with high saving level, the effect of such policies is positive through its effect on the efficiency of resources allocation of investment.

References used

Aghion P, Hewitt P, et Mayer-Foulkes D. (2005), The Effect of Financial Development on Convergence : Theory and Evidence, Quarterly Journal of Economics, Volume 120, Issue 1, pp 173-222
Arestis P, Demetriades P. O, Fattouh B et Mouratidis K. (2002), The Impact of Financial Liberalisation Policies on Financial Development Evidence from Developing Economies. University of Leicester, Department of Economics, Discussion Papers in Economics n° 02/1
Bai C. E, Li D. D, Qian Y et Wang Y. (2001), Financial Repression and Optimal Taxation, Economics Letters, Volume 70, n° 2, pp. 245-251

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