01725cas a2200241 a 4500 AALejournalIMF008567 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451954364 1018-5941 BD-DhAAL BD-DhAAL Scholnick, Barry. Testing a Disequilibrium Model of Lending Rate Determination : The Case of Malaysia / Barry Scholnick. Washington, D.C. : International Monetary Fund, 1991. 1 online resource (43 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This study examines whether lending rates cleared the market for loans in Malaysia after interest rate liberalization. It is based on a theoretical model in which adverse selection and marginal cost pricing are brought together by the use of a quadratic loss function in the error correction format. This allows for the use of the cointegration methodology. Long-run tests support the model proposed in the paper, while rejecting part of the financial liberalization model. From the short-run results it is concluded that there is a large lag before lending rates respond to exogenous shocks, thus confirming that they do not fully clear the market for loans. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1991/084 Full text available on IMF http://elibrary.imf.org/view/journals/001/1991/084/001.1991.issue-084-en.xml IMF e-Library