The PBC will continue to conduct agriculture-supporting central bank lending in a more regionally balanced and well-targeted manner. Timely and appropriate adjustments should be made to ensure that such central bank lending be used for its intended purpose. A favorable reserve requirement ratio is granted to RCCs to help channel more funds to the agricultural sector. Third, reinforce financial service infrastructure in rural areas.
Raising entry costs from very low levels such as those observed in Denmark, for example, to moderate levels like those in Spain might reduce per capita GDP and total factor productivity by up to 10%.4 And the small differences in the administrative cost of entry between Europe and the US seem to explain 10 to 20% of Europe’s lag vis-à-vis the US with regard to total factor productivity and the capital-output ratio – even though such quantitative estimates always have to be taken with a pinch of salt.5 2.2 Labour markets and productivity Barriers to market entry can exert a powerful drag on productivity.