IDEAS home Printed from https://ideas.repec.org/a/prg/jnlpep/v2005y2005i2id255p99-108.html
   My bibliography  Save this article

Spontaneous Euroization in the Czech Republic (is it a problem and why not?)

Author

Listed:
  • Martina Horníková
  • Jaromír Hurník
  • Viktor Kotlán

Abstract

The paper offers a preliminary analysis of possible spontaneous euroization in the Czech economy. After a brief general introduction of the issue of currency substitution it specifically discusses two things. First, the transmission channels of potential spontaneous euroization, through which the process could possibly complicate the implementation of domestic monetary policy. Second, it analyses the degree of euroization. Among the transmission channels, attention is paid to interest rate and exchange rate channels. The circumstances under which the transmission would be sub-optimal are discussed. Besides the impact on the monetary policy transmission, another risk of progressive spontaneous euroization is seen in the shift of the exchange rate risk from bigger to smaller enterprises in the economy. The available data do not allow a precise measurement of the degree of euroization. Nevertheless, both the ratio of euro-denominated over koruna-denominated deposits and the CNB's survey in 2003 suggest that euroization is not an obstacle for the Czech monetary policy at the moment.

Suggested Citation

  • Martina Horníková & Jaromír Hurník & Viktor Kotlán, 2005. "Spontaneous Euroization in the Czech Republic (is it a problem and why not?)," Prague Economic Papers, University of Economics, Prague, vol. 2005(2), pages 99-108.
  • Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:255:p:99-108
    as

    Download full text from publisher

    File URL: http://www.vse.cz/polek/download.php?jnl=pep&pdf=255.pdf
    Download Restriction: free of charge

    File URL: http://www.vse.cz/pep/255
    Download Restriction: free of charge

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Meade, Ellen E. & Müller-Plantenberg, Nikolas & Pisani, Massimiliano, 2002. "Exchange rate arrangements in EU accession countries: what are the options?," LSE Research Online Documents on Economics 28754, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    monetary policy; euroization; dollarization; transmission mechanism; currency; currency substitution;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F15 - International Economics - - Trade - - - Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:255:p:99-108. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frantisek Sokolovsky). General contact details of provider: http://edirc.repec.org/data/uevsecz.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.