Abstract:
Economic growth and development of market, stock exchange and related variables are among components which influence on business, economic activities and management of society. Financial repression is among economic variables greatly influencing on financial market specifically capital market and economic growth and development; so that, this concept caused to publish financial growth and development theory and its role on economic growth and development by Mackinnon and Shaw in the year 1970 and 1973 and on this basis financial repression is regarded as set of policies with the goal of obtaining income from financial systems and using them for creating resource at specific sectors of economy. Therefore, goal of the present article is involving government on pricing and allocating loans through repressing rate of real interest. Methodology of this research is historical method by studying scientific and theoretical basis with library studying by using data collected from Tehran stock exchange. Results of this study show that determining relationship of financial repression and economic growth and development and criterion for measuring financial repression is very important. There is no reverse significant relationship between indices of financial repression i.e. inflation and market indices i.e. industry index, financial index, total index and relationship of both variables is not equal.
Machine summary:
"Key terms related to this issue refer to summary of policies for financial repression including: 1) Financial repression is defined as negative real return of deposits which is obvious with respect to families 2) Financial repression decreases cost of government for supporting low valued rate of foreign currency due to facing with cost of releasing interest rate 3) Financial repression decreases rate of loan; consequently, remained demand for bank loan and goals for controlling growth is increased 4) Financial repression prevents long term goals of commercial banking system of government and improves underground loans 5) Financial repression devaluates income of family and principal goal is transferring to growth path of government which depends on investment, net export and domestic consumption Kletzer and Kohli (2001) believe that most of developing countries enact some regulations for domestic and international financial exchanges.
In partial index and then it was used from addition to benefiting from collected data Pearson correlation test, variance test, in Japan, China, Taiwan related to indices regression analysis and for being certain of evaluating financial repression, he from properties of regression test concluded that financial repression including: normality, linearity, decreases capital productivity through independence in errors of model, statics of controlling government, applying interest variables of research by using Eviews6 rate, foreign currency rate, determining software with significance error of 5% for volume of money and its exchange."