Financial repression

Not to be confused with Economic repression.

Financial repression refers to government implementation of policies to channel domestic funds to the public sector that in a deregulated market environment would go elsewhere. These policies are used to reduce the government's debt-to-GDP ratio. In the case of Japan, research suggests that financial repression can last for decades.

The term was introduced in 1973 by Stanford economists Edward S. Shaw and Ronald I. McKinnon to refer to well-intentioned but counterproductive policies that might impair a country’s economic development.

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