Calvo, Guillermo and Vegh, Carlos (1992): Currency Substitution in Developing Countries: An Introduction.
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This paper reviews the main policy and analytical issues related to currency substitution in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs; third, the effects of changes in the rate of growth of the money supply on the real exchange rate; fourth, the interaction between inflationary finance and currency substitution; and, finally, issues related to the empirical verification of the currency substitution hypothesis.
|Item Type:||MPRA Paper|
|Original Title:||Currency Substitution in Developing Countries: An Introduction|
|Keywords:||Currency substitution, dollarization, monetary policy|
|Subjects:||F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics|
|Depositing User:||Carlos Vegh|
|Date Deposited:||05. Feb 2010 06:28|
|Last Modified:||13. Feb 2013 10:50|
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