Basics, non-basics, money and credit: a development perspective

Amelia Correa, Romar Correa


We approach the developing economy through an agriculture/industry and basics/ non-basics demarcation. A Classical-Keynesian rationale for the high interest rates in the country and low interest rates in the town is provided. The institutional requirement is for a strongly inequality-reducing state, intervening in the financing and production of basics and, correspondingly, setting in place disincentives to the production of non-basics.


Basics; non-basics; interest rates

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