Currency Substitution In Developing Countries

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Currency Substitution in Developing Countries

Author : Mr.Guillermo Calvo
Publisher : International Monetary Fund
ISBN 13 : 145184588X
Total Pages : 32 pages
Book Rating : 4.4/5 (518 download)

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Book Synopsis Currency Substitution in Developing Countries by : Mr.Guillermo Calvo

Download or read book Currency Substitution in Developing Countries written by Mr.Guillermo Calvo and published by International Monetary Fund. This book was released on 1992-05-01 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 in Developing Countries

Author : Guillermo A. Calvo
Publisher :
ISBN 13 :
Total Pages : 35 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Currency Substitution in Developing Countries by : Guillermo A. Calvo

Download or read book Currency Substitution in Developing Countries written by Guillermo A. Calvo and published by . This book was released on 1999 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Currency Substitution in Developing Countries

Author : Diana Brand
Publisher :
ISBN 13 :
Total Pages : 288 pages
Book Rating : 4.3/5 ( download)

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Book Synopsis Currency Substitution in Developing Countries by : Diana Brand

Download or read book Currency Substitution in Developing Countries written by Diana Brand and published by . This book was released on 1993 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Foreign Currency Deposits and the Demand for Money in Developing Countries

Author : Mr.Mohsin S. Khan
Publisher : International Monetary Fund
ISBN 13 : 1451931301
Total Pages : 40 pages
Book Rating : 4.4/5 (519 download)

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Book Synopsis Foreign Currency Deposits and the Demand for Money in Developing Countries by : Mr.Mohsin S. Khan

Download or read book Foreign Currency Deposits and the Demand for Money in Developing Countries written by Mr.Mohsin S. Khan and published by International Monetary Fund. This book was released on 1992-01-01 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the relative demands for domestic and foreign currency deposits by residents of developing countries. A dynamic currency substitution model that incorporates forward-looking rational expectations is formulated and then estimated for a group of ten developing countries. The results indicate that the foreign rate of interest and the expected rate of depreciation of the parallel market exchange rate are important factors in the choice between holding domestic money or switching to foreign currency deposits held abroad. From an empirical standpoint, the forward-looking framework adopted here also turns out to be superior to the conventional currency-substitution model.

Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange

Author : Pierre-Richard Agénor
Publisher : International Monetary Fund
ISBN 13 : 1451923236
Total Pages : 44 pages
Book Rating : 4.4/5 (519 download)

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Book Synopsis Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange by : Pierre-Richard Agénor

Download or read book Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange written by Pierre-Richard Agénor and published by International Monetary Fund. This book was released on 1990-03-01 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper develops and tests a model of a developing economy that incorporates trade and capital restrictions, illegal transactions, a parallel foreign exchange market, currency substitution features, and forward-looking rational expectations. Temporary expansionary demand policies are associated with an increase in output and prices, a fall in the stock of net foreign assets, and a depreciation of the parallel exchange rate. The speed of adjustment is inversely related to the degree of rationing in the official foreign currency market. A once-for–all devaluation of the official exchange rate has no long-term effect on the premium.

Currency substitution in developing countries

Author : Guillermo A. Calvo
Publisher :
ISBN 13 :
Total Pages : 35 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Currency substitution in developing countries by : Guillermo A. Calvo

Download or read book Currency substitution in developing countries written by Guillermo A. Calvo and published by . This book was released on 1992 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Foreign Currency Deposits in Developing Countries-Origins and Economic Implications

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1451925190
Total Pages : 22 pages
Book Rating : 4.4/5 (519 download)

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Book Synopsis Foreign Currency Deposits in Developing Countries-Origins and Economic Implications by : International Monetary Fund

Download or read book Foreign Currency Deposits in Developing Countries-Origins and Economic Implications written by International Monetary Fund and published by International Monetary Fund. This book was released on 1987-01-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: The growing importance of foreign currency deposits (FCDs) in some developing countries has raised numerous issues, particularly regarding the effectiveness of economic policies. This paper discusses factors that influence the emergence of FCDs and their impact on key macroeconomic relations. It is shown that while FCDs render more visible the changes in the economic structure occasioned by the shift in residents’ portfolio asset preferences, these changes essentially reflect currency substitution that often prevails prior to the introduction of FCDs. Moreover, FCDs provide only limited scope for effectively addressing the external and domestic imbalances that contribute to the growth in currency substitution.

Currency Substitution in Developing Countries

Author : Guillermo A. Calvo
Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Currency Substitution in Developing Countries by : Guillermo A. Calvo

Download or read book Currency Substitution in Developing Countries written by Guillermo A. Calvo and published by . This book was released on 2006 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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

Author : Alberto Giovannini
Publisher :
ISBN 13 :
Total Pages : 78 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Currency Substitution by : Alberto Giovannini

Download or read book Currency Substitution written by Alberto Giovannini and published by . This book was released on 1992 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 in Developing Countries

Author : Md. Mahabub-ul Islam
Publisher :
ISBN 13 :
Total Pages : 340 pages
Book Rating : 4.:/5 (21 download)

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Book Synopsis Currency Substitution in Developing Countries by : Md. Mahabub-ul Islam

Download or read book Currency Substitution in Developing Countries written by Md. Mahabub-ul Islam and published by . This book was released on 1989 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Monetary Policy in Dollarized Economies

Author : Mr.Adam Bennett
Publisher : International Monetary Fund
ISBN 13 : 9781557757579
Total Pages : 62 pages
Book Rating : 4.7/5 (575 download)

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Book Synopsis Monetary Policy in Dollarized Economies by : Mr.Adam Bennett

Download or read book Monetary Policy in Dollarized Economies written by Mr.Adam Bennett and published by International Monetary Fund. This book was released on 1999-03-15 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dollarization - the holding by residents of a substantial portion of their assets in foreign-currency-denominated assets- is a common feature of developing and transition economies, and therefore typical of many countries with IMF - supported adjustment programs. This paper analyzes policy issues that arise-and various monetary strategies that may be pursued- when the monetary sector is dollarized, and it considers the implications that dollarization has for the design of IMF programs.

Inflation Targeting and Exchange Rate Management In Less Developed Countries

Author : Mr.Marco Airaudo
Publisher : International Monetary Fund
ISBN 13 : 1475523165
Total Pages : 65 pages
Book Rating : 4.4/5 (755 download)

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Book Synopsis Inflation Targeting and Exchange Rate Management In Less Developed Countries by : Mr.Marco Airaudo

Download or read book Inflation Targeting and Exchange Rate Management In Less Developed Countries written by Mr.Marco Airaudo and published by International Monetary Fund. This book was released on 2016-03-08 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze coordination of monetary and exchange rate policy in a two-sector model of a small open economy featuring imperfect substitution between domestic and foreign financial assets. Our central finding is that management of the exchange rate greatly enhances the efficacy of inflation targeting. In a flexible exchange rate system, inflation targeting incurs a high risk of indeterminacy where macroeconomic fluctuations can be driven by self-fulfilling expectations. Moreover, small inflation shocks may escalate into much larger increases in inflation ex post. Both problems disappear when the central bank leans heavily against the wind in a managed float.

Monetary Integration and Dollarization

Author : Matias Vernengo
Publisher : Edward Elgar Publishing
ISBN 13 : 1847200257
Total Pages : 319 pages
Book Rating : 4.8/5 (472 download)

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Book Synopsis Monetary Integration and Dollarization by : Matias Vernengo

Download or read book Monetary Integration and Dollarization written by Matias Vernengo and published by Edward Elgar Publishing. This book was released on 2006-01-01 with total page 319 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book brings together an impressive and diverse group of authors to discuss its central theme: whether or not the dollarized international monetary system is sustainable in the context of the global economy it helped create. In addition to its uniquely well-rounded and comprehensive coverage of the issues, this lively and highly readable volume provides an accurate assessment of the lack of consensus in the current debate. A must read for anyone interested in currency crises and the increasing vulnerability of the dollar. Jane D Arista, Director of Progams, Financial Markets Center, US This book deals with the economic consequences of monetary integration, which has long been dominated by the Optimal Currency Area (OCA) paradigm. In this model, money is perceived as having developed from a private sector cost minimization process to facilitate transactions. Not surprisingly, the book argues, the main advantage of monetary integration in the OCA context is the reduction of transaction costs, yet the validity of OCA to analyze processes of monetary integration seems to be limited at best. The contributors in this volume try to go beyond the OCA model and understand the political economy of monetary integration by comparing the European Monetary Union with the dollarization (formal and informal) process in Latin America. The contributors, many of whom are leading lights, reflect the disagreements and the changing views on the proper monetary arrangements in a globalized world and suggest that monetary integration and dollarization are not the solution for the great majority of countries around the world. Monetary Integration and Dollarization brings together mainstream and heterodox views of monetary integration and uses the European and North American experiences as a guide for the discussion of dollarization in developing countries. It will appeal to scholars, researchers and policy makers in the fields of financial and international economics.

Proceedings of a Conference on Currency Substitution and Currency Boards

Author : Nissan Liviatan
Publisher : World Bank Publications
ISBN 13 : 9780821325216
Total Pages : 132 pages
Book Rating : 4.3/5 (252 download)

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Book Synopsis Proceedings of a Conference on Currency Substitution and Currency Boards by : Nissan Liviatan

Download or read book Proceedings of a Conference on Currency Substitution and Currency Boards written by Nissan Liviatan and published by World Bank Publications. This book was released on 1993-01-01 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt: Eighteen well-known policymakers and economists discuss the rising use of currency substitution in Latin America. They examine the effects of currency boards on substitute currencies and on national stabilization programs. Latin American countries including Argentina, Bolivia, Peru, and Uruguay increasingly use dollars as a substitute for domestic currency. The experts debate whether the region should encourage or resist this trend. Topics include the effects of substitution on inflation, liquidity, and exchange rates. The discussions on Argentina, Peru, and Brazil focus on the ways in which currency boards have affected stabilization in these countries. They consider whether such boards can strengthen fiscal discipline and speed economic adjustment. A currency board issues money that is converted into a foreign reserve currency at a fixed exchange rate. This independent institution takes over the central bank's role as the sole issuer of base money. It also manages the exchange rate to keep the currency stable and convertible.

Currency Substitution

Author : Victor A. Canto
Publisher : Springer
ISBN 13 :
Total Pages : 216 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Currency Substitution by : Victor A. Canto

Download or read book Currency Substitution written by Victor A. Canto and published by Springer. This book was released on 1987-03-31 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: This work grew out of a series of investigations begun by the authors in 1980 and 1981. Specifically the authors pursued two lines of inquiry. First, to advance the state of the theoretical lit erature to better explain the crises of liberalization which seemed to be afflicting the third world in general and Latin America in particular. To do this, several different kinds of models were in vestigated and adapted. These are presented in Chapters 2, 3 and 5. Secondly an analysis of the empirical evidence was conducted in order to gain insight into the processes that were thought to be occurring and the theoretical models that were being developed. Some of this work appears in Chapters 3, 4, 5 and 6. Other work by the authors on these issues has been published elsewhere and is referenced herein. There are a great many people whose work and whose com ments have influenced this work. We would like to especially thank Guillermo Calvo, Michael Connolly, Sebastian Edwards, Roque Fernandez, Michael Darby, Robert Clower, Neil Wallace, John Kareken, Paul McNelis, Jeffrey Nugent, Jaime Marquez, Lee Ohanian, Leroy Laney, Jorge Braga de Macedo, Dale Henderson, vii Matthew Canzoneiri, Arthur Laffer, Marc Miles, and George Von Furstenberg whose ideas and comments gave rise to much of our work. We would like to thank Suh Lee for his assistance with the computations in Chapter 5.

Smuggling, Currency Substitution and Unofficial Dollarization

Author : Alex Mourmouras
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 50 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Smuggling, Currency Substitution and Unofficial Dollarization by : Alex Mourmouras

Download or read book Smuggling, Currency Substitution and Unofficial Dollarization written by Alex Mourmouras and published by International Monetary Fund. This book was released on 2000-10 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Large quantities of U.S. dollars and other hard currencies circulate alongside domestic currencies in many countries of the former Soviet Union, in Central, Eastern, and Southeastern Europe, the Middle East, Latin America and elsewhere. Over half of all U.S. currency outside banks is located abroad, and the foreign stock of U.S. currency has been growing about 3 times as fast as the domestic stock during the 1990s. Similarly, 30-40 percent of the deutsche marks outstanding are held outside Germany.2 The high degree of unofficial dollarization is one reason some emerging market policymakers sought to go the extra step of officially dollarizing their economies.3

Revisiting the Concept of Dollarization

Author : MissNkunde Mwase
Publisher : International Monetary Fund
ISBN 13 : 1484366913
Total Pages : 31 pages
Book Rating : 4.4/5 (843 download)

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Book Synopsis Revisiting the Concept of Dollarization by : MissNkunde Mwase

Download or read book Revisiting the Concept of Dollarization written by MissNkunde Mwase and published by International Monetary Fund. This book was released on 2015-01-22 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: The economic literature has examined deposit dollarization in nominal terms, typically focusing on the ratio of foreign currency deposits to broad money. However, while private agent demand for foreign currency may remain unchanged in foreign currency terms, there could be large fluctuations in the dollarization ratio simply due to exchange rate movements. This paper proposes a new approach to measuring dollarization that removes these exchange rate effects, and demonstrates that beyond the variance of inflation and depreciation, the level of inflation and size of depreciation also matter for dollarization. While dollarization in nominal terms surged during the recent global financial crisis, there was a downward trend in real terms. Employing a set of econometric estimators, this paper investigates whether “real” dollarization during 2006–09 was associated with the crisis, and the role of initial macroeconomic conditions, quality of institutions, risk aversion, and prudential measures. We find that exchange rate appreciation and reductions in sovereign risk do moderate dollarization; but the results for global volatility have low statistical significance, perhaps because global shocks tend to preserve, to a large extent, relative attractiveness of foreign assets. Nonetheless, estimated impulse-response functions point to a large but short-lived positive impact of global volatility on dollarization, which could reflect economic agents heightened concerns about spillover effects of global uncertainty on the domestic economy.