Economy
Small savings and interest rates: The real story
ONE OF the favourite predictions of the proponents of financial liberalisation measures in the 1990s was that the eventual result of such reforms would be reductions in real interest rates. It was argued that there would be an initial rise in such rates to redress the excessively low interest rates created by policies of ``financial repression''. In fact, this was argued to be both necessary and welcome because it was supposed to lead to higher rates of domestic saving as well.

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