Financial liberalisation programmes derived its strength from the neo-classical theory which assumed that money is exogenous under the control of the central bank. It also hypothesised that in a repressed regime investment is saving constrained. Hence a rise in interest rate gives rise to more saving and this enhances the banking systems ability to extend more credit and therefore investment increases. In contrast the post-Keynesian theory assumed the endogeneity of money. Further, it also assumed that investment is financed by credit, and investment which take place generates saving and...