Dollarization and Euroization in Transition Countries: Currency Substitution, Asset Substitution, Network Externalities and Irreversibility
We examine the extent, causes and consequences of transition countries’ use of foreign currency as a co-circulating medium of exchange and store of value. Using new estimates of foreign cash in circulation, we obtain unique measures of currency substitution, asset substitution, and dollarization, and examine the consequences of network externalities for hysteresis and irreversibility. Finally, we examine factors leading some transition countries to euroize officially and bilaterally, and others to euroize unilaterally - that is, without prior sanction by the EMU.
|Date of creation:||10 May 2002|
|Date of revision:|
|Note:||Type of Document - PDF; prepared on IBM PC ; to print on HP/PostScript; pages: 27 ; figures: included. Presented at the Fordham University International Conference on “Euro and Dollarization: Forms of Monetary Union in Integrating Regions” April 5 - 6, 2002, New York|
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