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Abstract

This thesis examines the effects of selective credit controls on the real sector of the Economy in the case of Greece.

The analysis of the financial sector indicates that the main source of funds for investment and consumer expenditure has been the banking sector. Throughout the post 1950 period, the Greek monetary authorities attempted to regulate the outflow of these funds from the banking system through a structure of selective credit policies which were designed to increase the flow of funds towards activities promoting economic growth and to restrict the availability of credit towards sectors whose expansion was considered detrimental to capital growth and development.

The present study examines whether the restrictions on the availability of consumer credit in Greece in the 60s succeeded in reducing consumer demand during that period.

In this context, the study constructs a model of consumer demand where the financial flow enters the demand for expenditure equation and empirically estimates the demand for certain consumer durables in Greece between 1960 and 1980. The analysis examines the significance of consumer credit as an explanatory variable and tests for significant shifts in consumers expenditure function over periods between which there were changes in the pattern of consumer credit restrictions.

The evidence of this study suggests that although credit controls may - temporarily - affect economic activity, their use as long-term policy instruments is not recommended; In the long- run not only is their effectiveness diminished but distortions and spill overs between financial markets may occur which could produce undesirable effects in the real sector of the economy.

Publication Type:	Thesis (Doctoral)
Subjects:	H Social Sciences > HG Finance H Social Sciences > HJ Public Finance
Departments:	Bayes Business School > Finance Doctoral Theses Bayes Business School > Bayes Business School Doctoral Theses

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