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Econometric Analysis of Currency Substitution: A Case of Latvia

  • Sarajevs, Vadims

    ()

    (BOFIT)

Registered author(s):

    The paper provides a comprehensive econometric analysis of currency substitution for Latvia. Rather than drawing inferences on the degree of currency substitution from domestic money demand modelling, the most common approach to empirical analysis of the phenomenon, direct modelling of currency substitution ratio is ap-plied. Extensive model construction, estimation, evaluation and testing are per-formed. Methodological issues are also discussed. No simple policy recommenda-tions can be made at this stage of research, but a number of instruments are identi-fied, which can be used by the authorities to influence currency substitution behaviour.

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    File URL: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/dp0400.pdf
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    Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 4/2000.

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    Length: 98 pages
    Date of creation: 20 May 2000
    Date of revision:
    Handle: RePEc:hhs:bofitp:2000_004
    Contact details of provider: Postal:
    Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland

    Phone: + 358 10 831 2268
    Fax: + 358 10 831 2294
    Web page: http://www.suomenpankki.fi/bofit_en/
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    16. Sturzenegger, Federico, 1997. "Understanding the welfare implications of currency substitution," Journal of Economic Dynamics and Control, Elsevier, vol. 21(2-3), pages 391-416.
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    24. Cuddington, John T. & Cuddington, John T., 1983. "Currency substitution, capital mobility and money demand," Journal of International Money and Finance, Elsevier, vol. 2(2), pages 111-133, August.
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    26. Imrohoroglu, Selahattin, 1994. "GMM Estimates of Currency Substitution between the Canadian Dollar and the U.S. Dollar," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(4), pages 792-807, November.
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    31. Calvo, Guillermo A & Rodriguez, Carlos Alfredo, 1977. "A Model of Exchange Rate Determination under Currency Substitution and Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 617-25, June.
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