Does Financial Repression Inhibit or Facilitate Economic Growth? A Case Study of Chinese Reform Experience*

Abstract

Abstract This article examines the impact of financial repression on economic growth during China's reform period. The aggregate financial repression index suggests that China's financial liberalization has been steady but gradual. Empirical estimation confirms that, on average, repressive policies helped economic growth, thanks probably to the prudent liberalization approach. But the impact turned from positive in the 1980s and the 1990s to negative in the 2000s, suggesting rising efficiency losses in recent years. Specifically, we find that lending to the state sector, interest rate regulation and capital account control were the main factors constraining China's economic growth in recent years.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 89 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.