ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Stock Market in a Liberalised Economy

Considerable debate rages about the impact of deregulation on the efficiency of the market. Free market advocates all too often tend to undermine the unruly behaviour of stock markets in the post liberalisation scenario. On the other hand, opponents believe that stock market reforms may lead to over-speculation, financial crisis and even a misallocation of resources at the cost of real sector growth and stability, as has been seen in the case of India. However, there is now an increasing recognition in LDCs that given the competition for foreign funding and limited availability of domestic finance, the equity market can play a beneficial role in providing capital to the productive sector as well as facilitate the process of privatisation.
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