Bank deposits and inflation expectations

Author(s): Doyle, Michelle (1998)

Created 22 Jul, 1998
Categories Working Papers
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Generally, the body of literature on savings behaviour concentrates on national savings or financial savings. This paper investigates the behavioural influences on domestic deposits in the banking sector of Barbados, using different inflation expectations schemes. As a small economy, with some restrictions to capital mobility coupled with an under-developed capital market, economic activity tends to be heavily financed by the banking sector. This critical role of the banking sector presents relevant liquidity consideration with respect to capital available to fuel economic growth. By virtue, if significant shifts in deposits are to be anticipated and deposit movement made more transparent, a better appreciation of what influences domestic bank deposits must be developed.

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