Currency Substitution in the Czech Republic 1993-2001
AbstractCurrency substitution appears to be an important issue affecting the design of monetary policy, especially in transition economies. Therefore, this paper strives to analyse the particular relevance of the currency substitution phenomenon in the Czech Republicâ€™s case. We initially discuss the various approaches and definitions of currency substitution that found in the literature. Subsequently, discussing the role of currency substitution in small open economies in transition with some illustrations relating to the Czech Republic, we distinguish and analyse a locally and globally substituting currency from a substituted one, as well as and analyse the consequences of euroisation. The empirical part of this paper presents estimations of a modified Branson and Henderson portfolio model for the Czech Republic. This provides a multiperspective approach to currency substitution in the broad sense. Further, we attempt to intensify the robustness of our estimation by applying several cointegration techniques, namely the Johansen procedure, ARDL, DOLS and ADL. Finally, we discuss the potential implications of the currency and asset substitution present according to our estimates in the Czech economy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Czech National Bank in its series Archive of Monetary Policy Division Working Papers with number 2001/40.
Date of creation: Dec 2001
Date of revision:
Contact details of provider:
Postal: Na Prikope 28, 115 03 Prague 1
Phone: 00420 2 2442 1111
Fax: 00420 2 2421 8522
Web page: http://www.cnb.cz/en/research/research_intro/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vittorio Grilli & Nouriel Roubini, 1995.
"Liquidity Models in Open Economies: Theory and Empirical Evidence,"
Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics
95-16, New York University, Leonard N. Stern School of Business, Department of Economics.
- Grilli, Vittorio & Roubini, Nouriel, 1996. "Liquidity models in open economies: Theory and empirical evidence," European Economic Review, Elsevier, vol. 40(3-5), pages 847-859, April.
- Nouriel Roubini & Vittorio Grilli, 1995. "Liquidity Models in Open Economies: Theory and Empirical Evidence," NBER Working Papers 5313, National Bureau of Economic Research, Inc.
- Martin Uribe, 1995.
"Hysteresis in a simple model of currency substitution,"
International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.)
509, Board of Governors of the Federal Reserve System (U.S.).
- Uribe, Martin, 1997. "Hysteresis in a simple model of currency substitution," Journal of Monetary Economics, Elsevier, vol. 40(1), pages 185-202, September.
- Pesaran, M. H. & Shin, Y. & Smith, R. J., 1996. "Testing for the 'Existence of a Long-run Relationship'," Cambridge Working Papers in Economics 9622, Faculty of Economics, University of Cambridge.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1996.
"Adoption of Financial Technologies: Implications for Money Demand and Monetary Policy,"
NBER Working Papers
5504, National Bureau of Economic Research, Inc.
- Mulligan, Casey B & Sala-i-Martin, Xavier, 1996. "Adoption of Financial Technologies: Implications for Money Demand and Monetary Policy," CEPR Discussion Papers 1358, C.E.P.R. Discussion Papers.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1995. "Adoption of financial technologies: Implications for money demand and monetary policy," Economics Working Papers 134, Department of Economics and Business, Universitat Pompeu Fabra.
- Thomas, Lee R, 1985. "Portfolio Theory and Currency Substitution," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 17(3), pages 347-57, August.
- Rogers, J.H., 1989.
"Foreign Inflation Transmission Under Flexible Exchange Rates And Currency Substitution,"
Papers, Pennsylvania State - Department of Economics
3-89-7, Pennsylvania State - Department of Economics.
- Rogers, John H, 1990. "Foreign Inflation Transmission under Flexible Exchange Rates and Currency Substitution," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 22(2), pages 195-208, May.
- Edgar L. Feige & Michael Faulend & Velimir Sonje & Vedran Sosic, 2001. "Currency Substitution, Unoffical Dollarization and Estimates of Foreign Currency Held Abroad: The Case of Croatia," International Finance, EconWPA 0106001, EconWPA.
- Canzoneri, Matthew B. & Diba, Behzad T., 1992. "The inflation discipline of currency substitution," European Economic Review, Elsevier, vol. 36(4), pages 827-845, May.
- Bufman, G. & Leiderman, L., 1992. "Simulating an Optimizing Model of Currency Substitution," Papers, Tel Aviv - the Sackler Institute of Economic Studies 6-92, Tel Aviv - the Sackler Institute of Economic Studies.
- Joannes Mongardini & Johannes Mueller, 2000. "Ratchet Effects in Currency Substitution: An Application to the Kyrgyz Republic," IMF Staff Papers, Palgrave Macmillan, vol. 47(2), pages 3.
- repec:fth:inseep:9645 is not listed on IDEAS
- Liliana Rojas-SuÃƒÂ¡rez, 1992. "Currency Substitution and Inflation in Peru," IMF Working Papers 92/33, International Monetary Fund.
- Handa, Jagdish & Bana, Ismail Mohamed, 1990. "Currency Substitution and Transactions Costs," Empirical Economics, Springer, vol. 15(3), pages 231-43.
- Frederic S. Mishkin, 2001. "Financial Policies and the Prevention of Financial Crises in Emerging Market Countries," NBER Working Papers 8087, National Bureau of Economic Research, Inc.
- Sturzenegger, Federico, 1997. "Understanding the welfare implications of currency substitution," Journal of Economic Dynamics and Control, Elsevier, vol. 21(2-3), pages 391-416.
- Federico A. Sturzenegger, 1992. "Currency Substitution and the Regressivity of Inflationary Taxation," UCLA Economics Working Papers 656, UCLA Department of Economics.
- Brian M. Doyle, 2000. ""Here, dollars, dollars ..."estimating currency demand and worldwide currency substitution," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 657, Board of Governors of the Federal Reserve System (U.S.).
- Alberto Giovannini & Bart Turtelboom, 1992. "Currency Substitution," NBER Working Papers 4232, National Bureau of Economic Research, Inc.
- Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
- Harrison , Barry & Vymyatnina, Yulia, 2007. "Currency substitution in a de-dollarizing economy: The case of Russia," BOFIT Discussion Papers 3/2007, Bank of Finland, Institute for Economies in Transition.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Babecky).
If references are entirely missing, you can add them using this form.