The Substitutability of Monetary Assets in Taiwan

Huang, Cliff J.; Cheng, Jen-Chi; Chou, Ching-Sheng; Lin, Shun-Ying Charles

doi:10.2307/1060233

Cited by 8 publications

(3 citation statements)

References 12 publications

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“…Therefore, the kerb interest rate drops. Huang et al (1992) is one of a few papers to discuss the dual financial system in Taiwan. It derives and estimates a model of monetary asset substitution in Taiwan.…”

Section: Literature Surveymentioning

confidence: 99%

An Analysis of the Structure of Interest Rates in Taiwan: An Application of the Vector ARIMA Model

Yang

1997

Asian Economic Journal

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The structure of interest rates in Taiwan is analysed through the vector ARIMA approach using monthly and quarterly data from 1978 to 1989. These rates are the regulated bank interest rate and unregulated money market interest rates in the formal financial market and the kerb rate in the informal market. The results show that the adjustments in the bank interest rate follow that of the money market interest rate. Furthermore, the time lag has been shortened from one quarter in the early stages of interest rate liberalization in Taiwan to only one month in the later stages. Increases in the money market interest rate might be followed by an increase in the kerb market interest rate because of partial market segmentation. In periods when there is an excess supply of funds in the banking sector, an increase in the bank rate might be followed by a decrease of the kerb rate. The interest rates structure of Taiwan is relevant to developing countries which have an informal financial sector.

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Section: Literature Surveymentioning

confidence: 99%

An Analysis of the Structure of Interest Rates in Taiwan: An Application of the Vector ARIMA Model

Yang

1997

Asian Economic Journal

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“…In Taiwan, for instance, the ratio of financial loans to private enterprises from the informal credit market to those from the regulated market averaged nearly 30% during the period 1971-1988 (Huang et al, 1992). In Taiwan, for instance, the ratio of financial loans to private enterprises from the informal credit market to those from the regulated market averaged nearly 30% during the period 1971-1988 (Huang et al, 1992).…”

Section: Informal Credit Marketsmentioning

confidence: 99%

Macroeconomic Management with Informal Financial Markets

Agénor

Haque

1996

Int. J. Fin. Econ.

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Informal credit and foreign currency markets are a widespread phenomenon in developing countries. This paper begins by reviewing the scope and nature of these markets, and the channels through which they operate. It then examines their implications for macroeconomic management, particularly in the areas of monetary and exchange rate policies, interest rate liberalization, and foreign exchange market unification. The analysis emphasizes the importance of accounting for the presence of informal markets in the design of macroeconomic reform programmes.

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“…Available information on informal loan markets, while fragmentary and relying on disparate and non-comparable sources across countries, suggests that the share of informal credit in total credit varies, in general, from about a quarter to about three-quarters. In Taiwan, for instance, the ratio of financial loans to private enterprises from the informal credit market to those from the regulated market averaged nearly 30% during the period 1971-1988 (Huang et al, 1992). In some African countries, the volume of loans transacted through the informal credit market even exceeds the amount of resources lent through formal financial markets (Aryeetey and Hyuha, 1991).…”

Section: Informal Credit Marketsmentioning

confidence: 99%