Results support Arestis's theory, that low real interest rates do not prevent economic growth (though he related it to the regulation debate). Here in the deregulation environment, it also stands. Results also support Shaw's assertion that financial liberalisation increases the monetary sector....

Advocates of financial regulation, Arestis and Demetriades, argue that financial liberalisation does not impact on financial market efficiency and the allocation of investment. Results in this study find that Czech, Hungarian and Polish firms are subject to scrutiny when applying for credit. The...