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Revisiting Dollarisation Hysteresis: Evidence from Bolivia, Turkey and Indonesia

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  • Miguel Lebre de Freitas

    () (Universidade de Aveiro and NIPE)

Abstract

In this paper, we pick up three countries with different inflation experiences and dollarisation levels and we investigate whether dollarisation exhibits different reversibility patterns, as suggested by the literature. The sample includes a country that experienced hyperinflation (Bolivia), a high inflation country (Turkey) and a country that experienced moderate to low inflation (Indonesia). By providing evidence of dollarisation hysteresis in these three countries, this paper challenges the view according to which this phenomenon is confined to highly dollarised economies or to economies that experienced high inflation rates for long periods of time.

Suggested Citation

  • Miguel Lebre de Freitas, 2003. "Revisiting Dollarisation Hysteresis: Evidence from Bolivia, Turkey and Indonesia," NIPE Working Papers 12/2003, NIPE - Universidade do Minho.
  • Handle: RePEc:nip:nipewp:12/2003
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    References listed on IDEAS

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    5. Miguel A Savastano, 1996. "Dollarization in Latin America; Recent Evidence and Some Policy Issues," IMF Working Papers 96/4, International Monetary Fund.
    6. Mohamed El-Erian, 1988. "Currency Substitution in Egypt and the Yemen Arab Republic: A Comparative Quantitative Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 35(1), pages 85-103, March.
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    12. Uribe, Martin, 1997. "Hysteresis in a simple model of currency substitution," Journal of Monetary Economics, Elsevier, vol. 40(1), pages 185-202, September.
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    Cited by:

    1. repec:bof:bofitp:urn:nbn:fi:bof-201511231446 is not listed on IDEAS
    2. repec:spr:jecfin:v:41:y:2017:i:4:d:10.1007_s12197-016-9379-1 is not listed on IDEAS
    3. Anna Krupkina & Alexey Ponomarenko, 2017. "Deposit dollarization in emerging markets: modelling the hysteresis effect," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(4), pages 794-805, October.
    4. Lazea, Valentin & Cozmanca, Bogdan Octavian, 2003. "Currency substitution in Romania," MPRA Paper 19813, University Library of Munich, Germany.

    More about this item

    Keywords

    Money demand; currency substitution; dollarisation; hysteresis.;

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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