Traditional specifications of money demand have been commonly plagued by persistent overprediction, implausible parameter estimates, and highly autocorrelated errors. This paper argues that some of those problems stem from the failure to account for the impact of financial innovation. We...

Many emerging market economies are dollarized in varying degrees. How important is this for the conduct of monetary policy and choice of exchange rate regime? We propose a composite measure of dollarization, identify its major trends, and ascertain its impact on the effectiveness of monetary and...

Dollarization, in a broad sense, is increasingly a defining characteristic of many emerging market economies. How important is this trend quantitatively and how important is it for the conduct of monetary policy and the choice of exchange rate regimes? Though these questions have become a hot...