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Currency Substitution And Its Implications: A Survey


  • Julide YILDIRIM

    (Afyon Kocatepe Universitesi, IIBF, Iktisat Bolumu)


Monetary theory traditionally assumes that economic agents hold the domestic currency for transactions and speculative purposes. However the v/idespread financial innovation has made the movements offunds and transfer of information across markets more rapid and less costly, leading to an increased degree of currency substitution. Currency substitution has important implications for the conduct of monetary policy, exchange rate determination and stability of demand for money functions. This study aims to provide an elaborate survey of the implications of currency substitution.

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  • Julide YILDIRIM, 2001. "Currency Substitution And Its Implications: A Survey," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 1(1), pages 65-91.
  • Handle: RePEc:ege:journl:v:1:y:2001:i:1:p:65-91

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    References listed on IDEAS

    1. Bert Hofman & Helmut Reisen, 1991. "Some evidence on debt-related determinants of investment and consumption in heavily indebted countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(2), pages 281-299, June.
    2. Cohen, Daniel, 1993. "Low Investment and Large LDC Debt in the 1980's," American Economic Review, American Economic Association, vol. 83(3), pages 437-449, June.
    3. Rockerbie, Duane W., 1993. "Credit rationing and macroeconomic adjustment in Latin America," The Quarterly Review of Economics and Finance, Elsevier, vol. 33(4), pages 325-342.
    4. Deshpande, Ashwini, 1997. "The debt overhang and the disincentive to invest," Journal of Development Economics, Elsevier, vol. 52(1), pages 169-187, February.
    5. Sawada, Yasuyuki, 1994. "Are the heavily indebted countries solvent?: Tests of intertemporal borrowing constraints," Journal of Development Economics, Elsevier, vol. 45(2), pages 325-337, December.
    6. Erdal Karagol, 2002. "The Causality Analysis of External Debt Service and GNP : The Case of Turkey," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 2(1), pages 39-64.
    7. Borensztein, Eduardo, 1990. "Debt overhang, credit rationing and investment," Journal of Development Economics, Elsevier, vol. 32(2), pages 315-335, April.
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    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates


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