Publication:
Evaluation of Financial Liberalization : A General Equilibrium Model with Constrained Occupation Choice

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dc.contributor.authorTownsend, Robert M.
dc.contributor.authorGine, Xavier
dc.date.accessioned2014-05-12T18:48:52Z
dc.date.available2014-05-12T18:48:52Z
dc.date.issued2003-04
dc.description.abstractThe objective of this paper is to assess both the aggregate growth effects and the distributional consequences of financial liberalization as observed in Thailand from 1976 to 1996. A general equilibrium occupational choice model with two sectors, one without intermediation, and the other with borrowing and lending, is taken to Thai data. Key parameters of the production technology and the distribution of entrepreneurial talent are estimated by maximizing the likelihood of transition into business given initial wealth as observed in two distinct datasets. Other parameters of the model are calibrated to try to match the two decades of growth as well as observed changes in inequality, labor share, savings, and the number of entrepreneurs. Without an expansion in the size of the intermediated sector, Thailand would have evolved very differently, namely, with a drastically lower growth rate, high residual subsistence sector, non-increasing wages, but lower inequality. The financial liberalization brings welfare gains and losses to different subsets of the population. Primary winners are talented would-be entrepreneurs who lack credit and cannot otherwise go into business (or invest little capital). Mean gains for these winners range from 17 to 34 percent of observed overall average household income. But liberalization also induces greater demand by entrepreneurs for workers resulting in increases in the wage and lower profits of relatively rich entrepreneurs of the same order of magnitude as the observed overall average income of firm owners. Foreign capital has no significant impact on growth or the distribution of observed income.en
dc.identifierhttp://documents.worldbank.org/curated/en/2003/04/2243833/evaluation-financial-liberalization-general-equilibrium-model-constrained-occupation-choice
dc.identifier.doi10.1596/1813-9450-3014
dc.identifier.urihttps://hdl.handle.net/10986/18263
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 3014
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectFINANCIAL LIBERALIZATION
dc.subjectAGGREGATE VARIABILITY
dc.subjectGROWTH PATTERNS
dc.subjectOCCUPATIONAL CHOICE
dc.subjectINTERMEDIATION
dc.subjectBORROWING OPERATIONS
dc.subjectPRODUCTION CAPACITY
dc.subjectTECHNOLOGY APPRAISAL
dc.subjectENTREPRENEURSHIP
dc.subjectBUSINESS ENVIRONMENT
dc.subjectINEQUITY
dc.subjectLABOR STATISTICS
dc.subjectSAVINGS BEHAVIOR
dc.subjectWELFARE ECONOMICS
dc.subjectFOREIGN CAPITAL
dc.subjectINCOME DISTRIBUTION AGRICULTURE
dc.subjectBANK OF SPAIN
dc.subjectCAPITAL EMPLOYED
dc.subjectCAPITALIZATION
dc.subjectCLOSED ECONOMY
dc.subjectCOMMERCIAL BANKS
dc.subjectCOST OF CAPITAL
dc.subjectCOST OF LIVING
dc.subjectCREDIT MARKETS
dc.subjectCURRENT ASSETS
dc.subjectDEPOSITS
dc.subjectDEREGULATION
dc.subjectDISTRIBUTION OF WEALTH
dc.subjectDUAL ECONOMY
dc.subjectECONOMIC DEVELOPMENT
dc.subjectENTREPRENEURSHIP
dc.subjectEQUILIBRIUM
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL DEEPENING
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL SECTOR
dc.subjectFIXED COSTS
dc.subjectFOREIGN CAPITAL
dc.subjectFOREIGN EXCHANGE
dc.subjectFUNCTIONAL FORMS
dc.subjectGDP
dc.subjectGENERAL EQUILIBRIUM MODEL
dc.subjectGROSS PROFIT
dc.subjectGROWTH RATE
dc.subjectHIGH INCOME
dc.subjectHOUSEHOLD INCOME
dc.subjectHUMAN CAPITAL
dc.subjectINCOME
dc.subjectINCOME DISTRIBUTION
dc.subjectINDUSTRIALIZATION
dc.subjectINHERITANCE
dc.subjectINPUT USE
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectLENDING RATES
dc.subjectLIBERALIZATION
dc.subjectMAXIMUM LIKELIHOOD ESTIMATION
dc.subjectMIGRATION
dc.subjectMONEYLENDERS
dc.subjectPER CAPITA INCOME
dc.subjectPOLITICAL ECONOMY
dc.subjectPRODUCTION FUNCTION
dc.subjectPRODUCTION TECHNOLOGY
dc.subjectPROFITABILITY
dc.subjectSAVINGS
dc.subjectUTILITY FUNCTION
dc.subjectUTILITY MAXIMIZATION
dc.subjectWAGES
dc.subjectWEALTH
dc.subjectWEALTH DISTRIBUTION
dc.subjectWELFARE GAINS
dc.subjectINCOME DISTRIBUTION
dc.subjectAGRICULTURE
dc.titleEvaluation of Financial Liberalization : A General Equilibrium Model with Constrained Occupation Choiceen
dspace.entity.typePublication
okr.crossref.titleEvaluation of Financial Liberalization: A General Equilibrium Model with Constrained Occupation Choice
okr.date.doiregistration2025-04-10T10:15:55.548824Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2003/04/2243833/evaluation-financial-liberalization-general-equilibrium-model-constrained-occupation-choice
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.guid678961468759600432
okr.identifier.doi10.1596/1813-9450-3014
okr.identifier.externaldocumentum000094946_03042204042889
okr.identifier.internaldocumentum2243833
okr.identifier.reportWPS3014
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2003/05/03/000094946_03042204042889/Rendered/PDF/multi0page.pdfen
okr.region.administrativeEast Asia and Pacific
okr.region.countryThailand
okr.sectorFinance :: Micro- and SME finance
okr.sectorFinance :: General finance sector
okr.topicEconomic Theory and Research
okr.topicBanks and Banking Reform
okr.topicMacroeconomics and Economic Growth::Economic Conditions and Volatility
okr.topicEnvironmental Economics and Policies
okr.topicInternational Terrorism and Counterterrorism
okr.topicFiscal and Monetary Policy
okr.topicFinance and Financial Sector Development
okr.unitFinance, Development Research Group
okr.volume1
relation.isAuthorOfPublication460a3e9c-f7d0-5335-977a-578f6fc8ebe3
relation.isAuthorOfPublication.latestForDiscovery460a3e9c-f7d0-5335-977a-578f6fc8ebe3
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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