Inflation, savings & financial development

Financial Developments in the last two decades have altered the economic frameworks of both developed and developing nations in ways that are difficult to comprehend. The persistent rise in the dispersion of current account balances of the world as a whole, wherein the sum of surpluses match the sum...

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Bibliographic Details
Published in:Finance India 2005-06, Vol.XIX (2), p.421-448
Main Authors: Agarwal, J D, Agarwal, Aman
Format: Article
Language:English
Subjects:
Capital flow
Capital market
Current account
Economic analysis
Economic development
Financial economics
Financial systems
India
Savings
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Summary:Financial Developments in the last two decades have altered the economic frameworks of both developed and developing nations in ways that are difficult to comprehend. The persistent rise in the dispersion of current account balances of the world as a whole, wherein the sum of surpluses match the sum of deficits has grown substantially since the World War II. The last century has seen the emergence of E-finance which apart from the efficiency, product enhancement and lower cost of transaction has facilitated the crisis frequencies; induce global savings means and contagion of inflation with the movement of capital flows internationally without much control. External finance has set forth the movements for growth in trade and development across regional barriers. We have attempted to model financial development being a function of inflation and savings coined together in an economy. Reprinted by permission of the Finance India - Indian Institute of Finance
ISSN:0970-3772