Author: Mr.Carlos A. Rodriguez
Publisher: International Monetary Fund
ISBN: 1451852193
Category : Business & Economics
Languages : en
Pages : 20
Book Description
This paper examines the effects on the supply of money and credit of a repatriation of foreign assets in an economy subject to currency substitution. In the absence of 100 percent reserve requirements, such a change in the location of deposits, which is not compensated by an increase in money demand, induces a credit boom that works itself out through a transitory current account deficit and real currency appreciation. These results are illustrated with data from the recent experience in Argentina and Peru where local banks have been authorized to capture dollar deposits from residents.
Money and Credit Under Currency Substitution
Author: Mr.Carlos A. Rodriguez
Publisher: International Monetary Fund
ISBN: 1451852193
Category : Business & Economics
Languages : en
Pages : 20
Book Description
This paper examines the effects on the supply of money and credit of a repatriation of foreign assets in an economy subject to currency substitution. In the absence of 100 percent reserve requirements, such a change in the location of deposits, which is not compensated by an increase in money demand, induces a credit boom that works itself out through a transitory current account deficit and real currency appreciation. These results are illustrated with data from the recent experience in Argentina and Peru where local banks have been authorized to capture dollar deposits from residents.
Publisher: International Monetary Fund
ISBN: 1451852193
Category : Business & Economics
Languages : en
Pages : 20
Book Description
This paper examines the effects on the supply of money and credit of a repatriation of foreign assets in an economy subject to currency substitution. In the absence of 100 percent reserve requirements, such a change in the location of deposits, which is not compensated by an increase in money demand, induces a credit boom that works itself out through a transitory current account deficit and real currency appreciation. These results are illustrated with data from the recent experience in Argentina and Peru where local banks have been authorized to capture dollar deposits from residents.
Money and credit under currency substitution
Author: Fondo Monetario Internacional
Publisher:
ISBN:
Category :
Languages : es
Pages : 13
Book Description
Publisher:
ISBN:
Category :
Languages : es
Pages : 13
Book Description
Currency Substitution in Developing Countries
Author: Mr.Guillermo Calvo
Publisher: International Monetary Fund
ISBN: 145184588X
Category : Business & Economics
Languages : en
Pages : 32
Book Description
This paper reviews the main policy and analytical issues related to currency substitution in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs; third, the effects of changes in the rate of growth of the money supply on the real exchange rate; fourth, the interaction between inflationary finance and currency substitution; and, finally, issues related to the empirical verification of the currency substitution hypothesis.
Publisher: International Monetary Fund
ISBN: 145184588X
Category : Business & Economics
Languages : en
Pages : 32
Book Description
This paper reviews the main policy and analytical issues related to currency substitution in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs; third, the effects of changes in the rate of growth of the money supply on the real exchange rate; fourth, the interaction between inflationary finance and currency substitution; and, finally, issues related to the empirical verification of the currency substitution hypothesis.
Currency Substitution and Financial innovation
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451977298
Category : Business & Economics
Languages : en
Pages : 24
Book Description
This paper presents a cash-in-advance framework, with variable income velocity, where the domestic effects, as well as the international transmission, of financial innovation can be analyzed. In particular, the discussion emphasizes the role of currency substitution and of cross-border transfers of seigniorage in determining the general equilibrium effects of financial innovation.
Publisher: International Monetary Fund
ISBN: 1451977298
Category : Business & Economics
Languages : en
Pages : 24
Book Description
This paper presents a cash-in-advance framework, with variable income velocity, where the domestic effects, as well as the international transmission, of financial innovation can be analyzed. In particular, the discussion emphasizes the role of currency substitution and of cross-border transfers of seigniorage in determining the general equilibrium effects of financial innovation.
Currency Substitution
Author: Alberto Giovannini
Publisher:
ISBN:
Category : Currency question
Languages : en
Pages : 78
Book Description
This paper reviews the extensive theoretical and empirical literature on currency substitution. After discussing the ambiguity surrounding the definition of currency substitution, the paper illustrates the causes of substitutability of different currencies using a cash-in-advance model and a model where money yields liquidity services. The effects of currency substitutability on exchange rates, international adjustment and the inflation tax are discussed. The paper also reviews the empirical facts on the size of currency substitution in developed and developing countries. Whereas currency substitution is found to be sizable in some developing countries and on the rise in the European Community, estimates of the ability to substitute foreign for domestic currency are often found to be unreliable due to data, methodological and conceptual problems. Policy implications of currency substitution for international monetary cooperation and inflationary finance are explored.
Publisher:
ISBN:
Category : Currency question
Languages : en
Pages : 78
Book Description
This paper reviews the extensive theoretical and empirical literature on currency substitution. After discussing the ambiguity surrounding the definition of currency substitution, the paper illustrates the causes of substitutability of different currencies using a cash-in-advance model and a model where money yields liquidity services. The effects of currency substitutability on exchange rates, international adjustment and the inflation tax are discussed. The paper also reviews the empirical facts on the size of currency substitution in developed and developing countries. Whereas currency substitution is found to be sizable in some developing countries and on the rise in the European Community, estimates of the ability to substitute foreign for domestic currency are often found to be unreliable due to data, methodological and conceptual problems. Policy implications of currency substitution for international monetary cooperation and inflationary finance are explored.
Currency Substitution and the Fluctuations of Foreign-exchange Reserves with Credibly Fixed Exchange Rates
Author: Alberto Giovannini
Publisher:
ISBN:
Category : Currency convertibility
Languages : en
Pages : 48
Book Description
This paper studies the fluctuations of foreign exchange reserves under a regime of credibly fixed exchange rates. The paper considers a variety of assumptions on the determinants of money demand and currency substitution.
Publisher:
ISBN:
Category : Currency convertibility
Languages : en
Pages : 48
Book Description
This paper studies the fluctuations of foreign exchange reserves under a regime of credibly fixed exchange rates. The paper considers a variety of assumptions on the determinants of money demand and currency substitution.
Currency Substitution in Developing Countries
Author: Diana Brand
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 288
Book Description
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 288
Book Description
Currency Substitution Under Finance Constraints
Author: Russell S. Boyer
Publisher:
ISBN:
Category : Currency convertibility
Languages : en
Pages : 66
Book Description
Publisher:
ISBN:
Category : Currency convertibility
Languages : en
Pages : 66
Book Description
Money, Exchange Rates, and Output
Author: Guillermo A. Calvo
Publisher: MIT Press
ISBN: 9780262032360
Category : Business & Economics
Languages : en
Pages : 536
Book Description
Guillermo Calvo, who foresaw the financial crisis that followed the devaluationn of Mexico's peso, has spent much of his career thinking beyond the conventional wisdom. In a quiet and understated way, Calvo has made seminal contributions to several major research areas in macroeconomics, particularly monetary policy, exchange rates, public debt, and stabilization in Latin America and post-communist countries. Money, Exchange Rates, and Output brings together these contributions in a broad selection of the author's work over the past two decades. There are introductions to each section, and an introduction to the entire collection that outlines the connections throughout and survey the current state of macroeconomic theory. Specific issues covered are predetermined exchange rates, currency substitution, domestic public debt and seigniorage, and stabilizing transition economics.
Publisher: MIT Press
ISBN: 9780262032360
Category : Business & Economics
Languages : en
Pages : 536
Book Description
Guillermo Calvo, who foresaw the financial crisis that followed the devaluationn of Mexico's peso, has spent much of his career thinking beyond the conventional wisdom. In a quiet and understated way, Calvo has made seminal contributions to several major research areas in macroeconomics, particularly monetary policy, exchange rates, public debt, and stabilization in Latin America and post-communist countries. Money, Exchange Rates, and Output brings together these contributions in a broad selection of the author's work over the past two decades. There are introductions to each section, and an introduction to the entire collection that outlines the connections throughout and survey the current state of macroeconomic theory. Specific issues covered are predetermined exchange rates, currency substitution, domestic public debt and seigniorage, and stabilizing transition economics.
Dollarization of Liabilities
Author: Mr.Adolfo Barajas
Publisher: International Monetary Fund
ISBN: 1451842805
Category : Business & Economics
Languages : en
Pages : 43
Book Description
Dollarization of liabilities (DL) has emerged as a key factor in explaining the vulnerability of emerging markets to financial and currency crises. "Usual suspects" of causing DL comprise "fatalistic" determinants such as a long history of unsound macroeconomic policies and development and institutional factors, aided by moral hazard opportunities related to government guarantees. This paper assesses empirically the relevance of these factors relative to alternative explanations. Based on a sample of Latin American countries, we find that ongoing central bank intervention in the foreign exchange market, relative market power of borrowers, and financial penetration are at least as important in explaining DL.
Publisher: International Monetary Fund
ISBN: 1451842805
Category : Business & Economics
Languages : en
Pages : 43
Book Description
Dollarization of liabilities (DL) has emerged as a key factor in explaining the vulnerability of emerging markets to financial and currency crises. "Usual suspects" of causing DL comprise "fatalistic" determinants such as a long history of unsound macroeconomic policies and development and institutional factors, aided by moral hazard opportunities related to government guarantees. This paper assesses empirically the relevance of these factors relative to alternative explanations. Based on a sample of Latin American countries, we find that ongoing central bank intervention in the foreign exchange market, relative market power of borrowers, and financial penetration are at least as important in explaining DL.