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   The Role of Banking Sector Policies in Financial Development: the Case of Iran  
نویسنده Taghipour Anoshirvan
منبع Journal Of Money And Economy - 2009 - دوره : 5 - شماره : 3 - صفحه:19 -52

the paper aims to investigate empirically the effects ofseveral types of financial restraints on financial development for the case ofthe iran.two hypotheses addressed and discussed in the context of the mckinnon/shaw andthe monopoly bank model. a conditional co-integration model has been employedto carry out the empirical investigations. the long and short-run analysis showthat financial restraints in general as well as ceilings on lending rates havehad a negative effect on financial depth in iran, supporting that the financialrestraints policy has hindered rather than helped financial deepening.therefore, in the context of the financial system imperfections (the monopolybank model) which is the case in iran, the finding could beinterpreted that the authorities have used a severe financial repression policywhich has caused a negative effect on financial development rather thandeveloping financial intermediation. in addition, our findings show that theper capita output is not weakly exogenous with respect to financialdevelopment, stating that financial development may bring economic growth inthe long-run. thus, policies that affect financial development are also likelyto influence economic growth.

the mainimplication of this paper is that if the government continues to tightenfinancial restraints in the banking sector, this policy does not developfinancial sector; therefore, it may damage the economic growth which is themain aim in the fydps.

jel: g18; g21; e44; e58


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