Rural savings, investment, and interest rates in developing countries : evidence from India

Farrukh Iqbal

ResearchPublished 1982

This study estimates interest elasticities of rural savings and investment in a major developing country, India, and examines the apparent effects on those factors of policies of financial repression. Critics claim that such policies inhibit rural savings and investment. The results, however, do not support such criticism. Interest-rate variations are found to exercise a weak (positive) effect on savings but a strong (negative) effect on rural investment, which suggests that low-interest-rate policies have a small "cost" in terms of savings forgone and a large "benefit" in terms of investment achieved. A low-interest-rate policy may be preferred, therefore, in countries where the rate of rural investment is perceived to be considerably below some socially desirable level.

Order a Print Copy

Format
Paperback
Page count
40 pages
List Price
$23.00
Buy link
Add to Cart

Topics

Document Details

  • Copyright: RAND Corporation
  • Availability: Available
  • Year: 1982
  • Print Format: Paperback
  • Paperback Pages: 40
  • Paperback Price: $23.00
  • Document Number: N-1763-AID

Citation

RAND Style Manual
Iqbal, Farrukh, Rural savings, investment, and interest rates in developing countries : evidence from India, RAND Corporation, N-1763-AID, 1982. As of September 13, 2024: https://www.rand.org/pubs/notes/N1763.html
Chicago Manual of Style
Iqbal, Farrukh, Rural savings, investment, and interest rates in developing countries : evidence from India. Santa Monica, CA: RAND Corporation, 1982. https://www.rand.org/pubs/notes/N1763.html. Also available in print form.
BibTeX RIS

This publication is part of the RAND note series. The note was a product of RAND from 1979 to 1993 that reported miscellaneous outputs of sponsored research for general distribution.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.