IDEAS home Printed from https://ideas.repec.org/p/wii/bpaper/071.html

Euroisation in Albania: From Spontaneous to Consensual

Author

Listed:
  • Erjon Luçi
  • Marta Muço
  • Elvira Sojli

Abstract

In this paper, we present a new estimation of the euroisation level of the Albanian economy taking into account both foreign deposits and foreign currency in circulation. We implement a recent novel methodology to calculate foreign currency in circulation. It is found that the overall level of euroisation including this often unaccounted measure is approximately 45 percent of total money. We also try to investigate some of the implications the re-estimated level of euroisation has on the actual monetary policy and the future path towards EMU.

Suggested Citation

  • Erjon Luçi & Marta Muço & Elvira Sojli, 2006. "Euroisation in Albania: From Spontaneous to Consensual," wiiw Balkan Observatory Working Papers 71, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:bpaper:071
    as

    Download full text from publisher

    File URL: https://wiiw.ac.at/euroisation-in-albania-from-spontaneous-to-consensual-dlp-3232.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mr. Philipp C Rother, 2000. "Inflation in Albania," IMF Working Papers 2000/207, International Monetary Fund.
    2. Cottarelli, Carlo & Dell'Ariccia, Giovanni & Vladkova-Hollar, Ivanna, 2005. "Early birds, late risers, and sleeping beauties: Bank credit growth to the private sector in Central and Eastern Europe and in the Balkans," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 83-104, January.
    3. Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear of Floating," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 379-408.
    4. Rudi Dornbusch, 2001. "Fewer Monies, Better Monies," American Economic Review, American Economic Association, vol. 91(2), pages 238-242, May.
    5. Kunst, Robert M. & Luniku, Rubin, 1998. "Inflation, its Dynamics, and its Possible Causes in Albania," East European Series 57, Institute for Advanced Studies.
    6. Erjon Luçi & Marta Muço & Peter Sanfey, 2001. "Stabilization, monetary policy and financial institutions in Albania," wiiw Balkan Observatory Working Papers 16, The Vienna Institute for International Economic Studies, wiiw.
    7. Andrew Berg & Eduardo Borensztein, 2000. "The Choice of Exchange Rate Regime and Monetary Target in Highly Dollarized Economies," Journal of Applied Economics, Taylor & Francis Journals, vol. 3(2), pages 285-324, November.
    8. Calvo, Guillermo A, 2001. "Capital Markets and the Exchange Rate with Special Reference to the Dollarization Debate in Latin America," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 312-334, May.
    9. Oleh Havrylyshyn & Christian H Beddies, 2003. "Dollarisation in the Former Soviet Union: from Hysteria to Hysteresis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 45(3), pages 329-357, September.
    10. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 15(30), pages 08-45.
    11. repec:imf:imfops:1999/003 is not listed on IDEAS
    12. Calvo, Guillermo & Vegh, Carlos, 1992. "Currency Substitution in Developing Countries: An Introduction," MPRA Paper 20338, University Library of Munich, Germany.
    13. Patrick Osakwe & Lawrence L. Schembri, 1998. "Currency crises and fixed exchange rates in the 1990s: A review," Bank of Canada Review, Bank of Canada, vol. 1998(Autumn), pages 23-38.
    14. Peeters, Marga, 2005. "What about monetary transmission in Albania? Is the exchange rate pass-through (still) the main channel?," MPRA Paper 23671, University Library of Munich, Germany, revised 24 Oct 2005.
    15. Muco, Marta & Papapanagos, Harry & Sanfey, Peter, 1999. "The Determinants of Official and Free-Market Exchange Rates in Albania during Transition," Journal of Comparative Economics, Elsevier, vol. 27(3), pages 534-552, September.
    16. Adalbert Winkler & Francesco Mazzaferro & Carolin Nerlich & Christian Thimann, 2004. "Official dollarisation/euroisation - motives, features and policy implications of current cases," Occasional Paper Series 11, European Central Bank.
    17. Genti Hashorva & Erjon Luçi & Marta Muço & Peter Sanfey, 2004. "Private Sector and Labour Market Developments in Albania: Formal versus Informal," wiiw Balkan Observatory Working Papers 39, The Vienna Institute for International Economic Studies, wiiw.
    18. Mr. Sanja Kalra, 1998. "Inflation and Money Demand in Albania," IMF Working Papers 1998/101, International Monetary Fund.
    19. Joannes Mongardini & Johannes Mueller, 2000. "Ratchet Effects in Currency Substitution: An Application to the Kyrgyz Republic," IMF Staff Papers, Palgrave Macmillan, vol. 47(2), pages 1-3.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Edlira Narazani, 2013. "A Micro Level Perspective of Euroization in Albania," wiiw Balkan Observatory Working Papers 109, The Vienna Institute for International Economic Studies, wiiw.
    2. Olta Manjani, 2015. "Estimating the Determinants of Financial Euroization in Albania," IHEID Working Papers 07-2015, Economics Section, The Graduate Institute of International Studies.
    3. World Bank, 2010. "Albania - The New Growth Agenda : A Country Economic Memorandum," World Bank Publications - Reports 2935, The World Bank Group.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2014. "Addicted to Dollars," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 1-51, May.
    2. International Monetary Fund, 2002. "Macroeconomic Adjustment in a Highly Dollarized Economy: The Case of Cambodia," IMF Working Papers 2002/092, International Monetary Fund.
    3. Metin-Özcan, Kıvılcım & Us, Vuslat, 2007. "Dedollarization in Turkey after decades of dollarization: A myth or reality?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 385(1), pages 292-306.
    4. Arratibel, Olga & Martin, Reiner & Furceri, Davide, 2008. "Real convergence in Central and Eastern European EU Member States: which role for exchange rate volatility?," Working Paper Series 929, European Central Bank.
    5. Erjon Luçi & Marta Muço & Peter Sanfey, 2001. "Stabilization, monetary policy and financial institutions in Albania," wiiw Balkan Observatory Working Papers 16, The Vienna Institute for International Economic Studies, wiiw.
    6. repec:cuf:journl:y:2015:v:16:i:1:reinhart:rogoff:savastano is not listed on IDEAS
    7. Arratibel, Olga & Furceri, Davide & Martin, Reiner & Zdzienicka, Aleksandra, 2011. "The effect of nominal exchange rate volatility on real macroeconomic performance in the CEE countries," Economic Systems, Elsevier, vol. 35(2), pages 261-277, June.
    8. Grandes, Martín & Reisen, Helmut, 2005. "Exchange rate regimes and macroeconomic performance in Argentina, Brazil and Mexico," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    9. Fujiki, Hiroshi & Otani, Akira, 2002. "Do Currency Regimes Matter in the 21st Century? An Overview," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 20(S1), pages 47-79, December.
    10. Kyriakos C. Neanidis & Christos S. Savva, 2006. "The Effects of Uncertainty on Currency Substitution and Inflation: Evidence from Emerging Economies," Economics Discussion Paper Series 0609, Economics, The University of Manchester.
    11. Sebastian Edwards, 2011. "Exchange-Rate Policies in Emerging Countries: Eleven Empirical Regularities From Latin America and East Asia," Open Economies Review, Springer, vol. 22(4), pages 533-563, September.
    12. Adenutsi, Deodat E. & Yartey, Charles A., 2007. "Financial sector development and the macrodynamics of ‘de facto’ dollarisation in developing countries: the case of Ghana," MPRA Paper 29333, University Library of Munich, Germany.
    13. Sebastian Edwards & I. Igal Magendzo, 2003. "Dollarization and economic performance: What do we really know?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 351-363.
    14. Nienke Oomes, 2003. "Network Externalities and Dollarization Hysteresis: The Case of Russia," IMF Working Papers 2003/096, International Monetary Fund.
    15. Berg, Andrew & Borensztein, Eduardo & Mauro, Paolo, 2002. "An evaluation of monetary regime options for Latin America," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 213-235, December.
    16. Prock, Jerry & Soydemir, Gokce A. & Abugri, Benjamin A., 2003. "Currency substitution: Evidence from Latin America," Journal of Policy Modeling, Elsevier, vol. 25(4), pages 415-430, June.
    17. Hochreiter, Eduard & Schmidt-Hebbel, Klaus & Winckler, Georg, 2002. "Monetary union: European lessons, Latin American prospects," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 297-321, December.
    18. John Duffy & Maxim Nikitin, 2004. "Dollarization Traps," Econometric Society 2004 Latin American Meetings 196, Econometric Society.
    19. Betts, Caroline & Devereux, Michael B, 2000. "International Monetary Policy Coordination and Competitive Depreciation: A Reevaluation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(4), pages 722-745, November.
    20. Arteta, Carlos, 2002. "Exchange Rate Regimes and Financial Dollarization: Does Flexibility Reduce Bank Currency Mismatches?," Center for International and Development Economics Research, Working Paper Series qt9jb1p0jg, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    21. Sebastian Edwards & I. Igal Magendzo, 2001. "Dollarization, Inflation and Growth," NBER Working Papers 8671, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    ;
    ;
    ;

    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:wii:bpaper:071. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Customer service (email available below). General contact details of provider: https://edirc.repec.org/data/wiiwwat.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.