Articles by Deena R Khatkhate

Assessing the Level of Interest Rates in Less Developed Countries Deena R Khatkhate This paper underscores the difficulties of measuring the level of real interest rates and suggests an alternative to approximate real interest rates in less developed countries (LDCs). The rationale for doing so lies in the fact that there needs to be a reasonable relationship between domestic nominal interest rate and adjusted foreign interest rate since, even in LDCs with trade and exchange controls, domestic currency and financial assets are always substituted, legally or otherwise, for foreign currency and financial assets.

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In less developed countries money's role need neither be denigrated nor exaggerated, Money's traditional functions as medium of exchange and store of value remain important in these countries, but its function as a conduit of resources from savers to investors is more central to an understanding of its con- tribution to development. This view of money and monetary policy in the less developed countries has been strengthened in recent years by a growing body of theoretical and empirical work in this area.