Currency substitution and the transactions demand for money in Vietnam
AbstractWe estimate the demand for money in Vietnam during the 1990s within a framework which distinguishes between currency substitution and portfolio dimensions of dollarization. This leads to a representation for the demand function in which the long-run income elasticity of demand is no longer constant but is a function of the expected rate of depreciation. We find evidence for currency substitution only in the long-run, and for portfolio effects only in the short-run. We interpret this as being consistent with the existence of costs associated with changing the transactions technology.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 200228.
Date of creation: 2002
Date of revision:
Vietnam.; Demand for Money; Currency Substitution; Dollarization;
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