Interest Rate Liberalization and Capital Misallocations
研究中国利率自由化在双部门一般均衡模型中的后果，发现利率自由化可能加剧部门间资本错配，降低全要素生产率和福利，除非同时实施其他改革。
We study the consequences of interest rate liberalization in a two-sector general equilibrium model of China. The model captures a key feature of China’s distorted financial system: state-owned enterprises (SOEs) have greater incentive to expand production and easier access to credit than private firms. In this second-best environment, interest rate liberalization can improve capital allocations within each sector but can also exacerbate misallocations across sectors. Under calibrated parameters, the liberalization policy can reduce aggregate productivity and welfare unless other policy reforms are also implemented to alleviate SOEs’ distorted incentives or improve private firms’ credit access.