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Domestic Price Dollarization in Emerging Economies
Drenik, Andres; Perez, Diego - 2022
This paper studies the dollarization of prices in retail markets of emerging economies. We develop a model of the firm’s optimal currency choice in retail markets in inflationary economies. We derive theoretical predictions regarding the optimality of dollar pricing, and test them using data...
Persistent link: https://www.econbiz.de/10014094629
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The Desirability of a Dollar Appreciation, Given a Contractionary U.S. Monetary Policy
Frankel, Jeffrey A. - 2022
. In the other country, say Europe, the exchange rate change worsens inflation.This paper starts from the premise that … rate change is also good for Europe. Given the U.S. contraction, the European export sectors would suffer a …
Persistent link: https://www.econbiz.de/10013308503
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Evaluation of Exchange-Rate, Capital Market, and Dollarization Regimes in the Presence of Sudden Stops
Razin, Assaf; Rubinstein, Yona - 2021
The literature has not being able to identify clear-cut real effects of exchange-rate regimes on output growth. Similarly, no definitive view emerges from the literature in regard to the effects of open capital markets on macroeconomic performance. The paper attributes the failure of the...
Persistent link: https://www.econbiz.de/10013225587
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On the Benefits of Dollarization When Stabilization Policy is Not Credible and Financial Markets are Imperfect
Mendoza, Enrique G. - 2021
financial frictions that result in endogenous credit constraints. The analysis is based on numerical simulations of a two … credit constraints are very costly distortions. The mean welfare gains of eliminating policy uncertainty range between 6 ….4 and 9 percent of the trend level of consumption per capita. The mean welfare gain of weakening credit frictions is about 4 …
Persistent link: https://www.econbiz.de/10013227195
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A Dynamic Theory of Lending Standards
Fishman, Michael J.; Parker, Jonathan A.; Straub, Ludwig - 2022
We develop a tractable dynamic model of credit markets in which lending standards and the quality of potential … can amplify and prolong temporary downturns, affecting lending volume, credit spreads, and default rates. We characterize … constraints naturally incentivize tight lending standards, further amplifying shocks to credit markets …
Persistent link: https://www.econbiz.de/10013405901
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On the Determinants of Exporters' Currency Pricing : History vs. Expectations
Fukuda, Shin-Ichi - 2006
The purpose of this paper is to investigate why the choice of invoice currency under exchange rate uncertainty depends not only on expectations but also on history. The analysis is motivated by the fact that the U.S. dollar has historically been the dominant vehicle currency in developing...
Persistent link: https://www.econbiz.de/10012779585
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Liquidity Insurance in a Financially Dollarized Economy
Levy-Yeyati, Eduardo Levy - 2010
Unlike the financial dollarization (FD) of external liabilities, the dollarization of domestic financial assets (domestic FD) has received comparatively less attention until very recently, when it has been increasingly seen as a key source of balance sheet exposure. This paper focuses on a...
Persistent link: https://www.econbiz.de/10012761262
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Optimal Currency Shares in International Reserves : The Impact of the Euro and the Prospects for the Dollar
Papaioannou, Elias - 2010
Foreign exchange reserve accumulation has risen dramatically in recent years. The introduction of the euro, greater liquidity in other major currencies, and the rising current account deficits and external debt of the United States have increased the pressure on central banks to diversify away...
Persistent link: https://www.econbiz.de/10012761272
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Dollarization and Economic Performance : An Empirical Investigation
Edwards, Sebastian - 2021
In this paper I investigate the historical record of countries that have lived under a 'dollarized' monetary system. As it turns out, this is a very small group of counties, most of which have operated under very special circumstances, and for which there are very limited data. The results...
Persistent link: https://www.econbiz.de/10013216489
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Dollarization and Trade
Klein, Michael W. - 2021
Dollarization has been suggested as a policy that might, among other goals, promote trade between a country adopting the dollar and the United States. Evidence supporting this conjecture could be drawn from a recent series of papers by Rose and co-authors who show that a currency union increases...
Persistent link: https://www.econbiz.de/10013234918