The behavior of foreign currency holdings during currency crises: Causes and consequences
This paper evaluates the current literature on dollarization and finds it to be disappointing in its ability to explain many of the prevailling features of the dollarizations experiences in Latin America, Eastern Europe and the Former Soviet Union. The paper takes a different approach to the standard empirical studies, which usually extend a demand for money function to include international variables, by analyzing foreign currency holding behaviors in response to the sustainability and credibility of the exchange rate regime. The results are very promising and explain some of the previously unexplained phenomena which arise from dollarization. Copyright Kluwer Academic Publishers 1996
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- Pablo E. Guidotti & Carlos A. Rodriguez, 1992.
"Dollarization in Latin America: Gresham's Law in Reverse?,"
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- Pablo Emilio Guidotti & Carlos A. Rodriguez, 1991. "Dollarization in Latin America; Gresham's Law in Reverse?," IMF Working Papers 91/117, International Monetary Fund.
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- Reinhart, Carmen & Arrau, Patricio & DeGregorio, Jose & Wickham, Peter, 1991. "The demand for money in developing countries: Assessing the role of financial innovation," MPRA Paper 13691, University Library of Munich, Germany.
- Jose De Gregorio & Peter Wickham & Patricio Arrau & Carmen Reinhart, 1991. "The Demand for Money in Developing Countries; Assessing the Role of Financial innovation," IMF Working Papers 91/45, International Monetary Fund.
- Arrau, Patricio & De Gregorio, Jose & Reinhart, Carmen & Wickham, Peter, 1991. "The demand for money in developing countries : assessing the role of financial innovation," Policy Research Working Paper Series 721, The World Bank.
- Calvo, Guillermo & Vegh, Carlos, 1992.
"Currency Substitution in Developing Countries: An Introduction,"
20338, University Library of Munich, Germany.
- Guillermo Calvo & Carlos A. VÃ©gh Gramont, 1992. "Currency Substitution in Developing Countries; An Introduction," IMF Working Papers 92/40, International Monetary Fund.
- Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107, March.
- Sahay, Ratna & Vegh, Carlos, 1995.
"Dollarization in transition economies: Evidence and policy implications,"
20490, University Library of Munich, Germany.
- Carlos A. VÃ©gh Gramont & Ratna Sahay, 1995. "Dollarization in Transition Economies; Evidence and Policy Implications," IMF Working Papers 95/96, International Monetary Fund.
- Mizen, Paul, 1999. "Can foreign currency deposits prop up a collapsing exchange-rate regime?," Journal of Development Economics, Elsevier, vol. 58(2), pages 553-562, April.
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