The paper aims to investigate empirically the effects of several types of financial restraints on financial development for the case of the Iran. Two hypotheses addressed and discussed in the context of the McKinnon/Shaw and the monopoly bank model. A conditional co-integration model has been employed to carry out the empirical investigations. The long and short-run analysis show that fin...

In Iran, interest rate is regulated by government by setting a ceiling for the credits allocated to various economic sectors. In recent years, the old theory of financial repression in the form of reducing interest rate of credits has been considered as a necessity to stimulate and encourage investment and economic sectors expansion in Iran. This study investigates the effects of this poli...

The large and widening gap between economic performance in Eastern European transition economies and those of the former Soviet Union has been dubbed “the Great Divide” by Berglof and Bolton (2002). This paper provides a rationale for the gap based upon the concept of financial repression. The magnified effects of transition to the market can be attributed to the government manipulation of fina...

• The financial crisis modified drastically and rapidly the European financial system’s political economy, with the emergence of two competing narratives. First, government agencies are frequently described as being at the mercy of the financial sector, routinely hijacking political, regulatory and supervisory processes, a trend often referred to as “capture”. But alternatively, governments are...

Abstract Stabilising the exchange rate allows Russian government to anchor inflation expectations and support consumption but comes at cost of financial repression domestic savers.