Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

Overburdened and Underrated: Understanding the Effects of Financial Repression

Thuresson, Carl LU and Norman, Valdemar LU (2023) NEKN01 20231
Department of Economics
Abstract
Financial Repression is increasingly recognized as a viable approach to address high and unsustainable debt levels. Despite its history dating back to the early-mid 1900s, the economic implications of Financial Repression have yet to be fully explored. This paper investigates the effects of Financial Repression, specifically the relationship between two key economic indicators: the exchange rate and the current account. We consider three measures of Financial Repression: Interest Rate Controls, Real Interest Rate, and Taylor Rule Deviation. We use various regression methods in a panel data set, including 90 countries from 1973 to 2017. We find that Financial Repression has a negative effect on the exchange rate, while we find no robust... (More)
Financial Repression is increasingly recognized as a viable approach to address high and unsustainable debt levels. Despite its history dating back to the early-mid 1900s, the economic implications of Financial Repression have yet to be fully explored. This paper investigates the effects of Financial Repression, specifically the relationship between two key economic indicators: the exchange rate and the current account. We consider three measures of Financial Repression: Interest Rate Controls, Real Interest Rate, and Taylor Rule Deviation. We use various regression methods in a panel data set, including 90 countries from 1973 to 2017. We find that Financial Repression has a negative effect on the exchange rate, while we find no robust evidence of a relationship between Financial Repression and the current account. Given the discovered impact of Financial Repression on the exchange rate, we discuss the potential outcomes it may entail. (Less)
Please use this url to cite or link to this publication:
author
Thuresson, Carl LU and Norman, Valdemar LU
supervisor
organization
course
NEKN01 20231
year
type
H1 - Master's Degree (One Year)
subject
keywords
Financial Repression, the current account, the exchange rate, Interest Rate Controls, Real Interest Rate
language
English
id
9119820
date added to LUP
2023-09-12 15:38:41
date last changed
2023-09-12 15:38:41
@misc{9119820,
  abstract     = {{Financial Repression is increasingly recognized as a viable approach to address high and unsustainable debt levels. Despite its history dating back to the early-mid 1900s, the economic implications of Financial Repression have yet to be fully explored. This paper investigates the effects of Financial Repression, specifically the relationship between two key economic indicators: the exchange rate and the current account. We consider three measures of Financial Repression: Interest Rate Controls, Real Interest Rate, and Taylor Rule Deviation. We use various regression methods in a panel data set, including 90 countries from 1973 to 2017. We find that Financial Repression has a negative effect on the exchange rate, while we find no robust evidence of a relationship between Financial Repression and the current account. Given the discovered impact of Financial Repression on the exchange rate, we discuss the potential outcomes it may entail.}},
  author       = {{Thuresson, Carl and Norman, Valdemar}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Overburdened and Underrated: Understanding the Effects of Financial Repression}},
  year         = {{2023}},
}