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Financial liberalisation and liquidity constraints in Myanmar and Nepal: Some empirical evidence

Habibullah, Muzafar Shah and Smith, Peter (2001) Financial liberalisation and liquidity constraints in Myanmar and Nepal: Some empirical evidence Savings and Development, 2, pp. 123-139.

Record type: Article


One important effect of financial liberalisation is to reduce liquidity constraints. The ability of households to borrow and adjust their financial portfolios has important implications for monetary aggregates and consequently for the conduct of monetary policy. To investigate whether financial liberalisation has reduced liquidity constraints in Myanmar and Nepal, we employ the Euler equation approach.
Our estimate of the fraction of liquidity constrained consumers is about 0.7 - 0.8. Further, our result suggests that financial liberalisation has resulted in the reduction of liquidity constraints in Nepal but not in Myanmar.

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Published date: 2001


Local EPrints ID: 35225
ISSN: 0393-4551
PURE UUID: 6fe2223a-f490-40e1-bb9c-49b2987fb4a6

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Date deposited: 16 May 2006
Last modified: 17 Jul 2017 15:48

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Author: Muzafar Shah Habibullah
Author: Peter Smith

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