Dollarization in Russia increased rapidly during the early 1990s, but failed to come down in the second half of the 1990s in spite of exchange rate stabilization. To explain this dollarization hysteresis, this paper develops a model in which network externalities in the demand for currency can...

It is a known fact that the use of foreign currency by domestic residents shows significance persistence, even hysteresis. Temporary changes in the inflation rate can have permanent effects on the degree of currency substitution, as illustrated by the case of Bolivia, where dollarization has...

The increase in dollarisation in Cambodia has been contrary to the general belief that macroeconomic and political stability help reduce dollarisation. We provide so far the first explanation for this counterfactual phenomenon. In doing so, this paper develops a cash-in-advance model by...

The analysis of external economic relations of Russia reveals a paradox: while Europe is the main trade and direct investment partner of Russia, this is far from being the case concerning its currency s role in Russia's financial activities.The dollar is much preferred by economic agents for...

This paper aims to investigate the demand for money in Kazakhstan. This study covers the period starting from 2000:01, when capital liberalization program was launched and National Bank approved managed float regime (National Bank employed adjustable exchange rate regime before exchange rate...

The analysis of external economic relations of Russia reveals a paradox: while Europe is the main trade and direct investment partner of Russia, this is far from being the case concerning its currency's role in Russia's financial activities. The dollar is much preferred by economic agents for...

This study contributes to the dollarization literature by expanding its determinants to account for different dimensions of globalization, using the widely employed KOF index of globalization. Specifically, globalization is “unbundled” into three different layers namely: economic, social and...

This paper aims to investigate the demand for money in Kazakhstan. This study covers the period starting from 2000:01, when capital liberalization program was launched and National Bank approved managed float regime (National Bank employed adjustable exchange rate regime before exchange rate...

This study contributes to the dollarization literature by expanding its determinants to account for different dimensions of globalization, using the widely employed KOF index of globalization. Specifically, globalization is "unbundled" into three different layers namely : economic, social and...

The paper explores the implications of means of payment substitutability and capital mobility on the properties of the money demand, using the Thomas (1985) stochastic dynamic optimising model, where the specific role of money is explicitly accounted for. Extending the model to a case in which...