منابع مشابه
Evolutionary Dynamics of Currency Substitution
This paper examines the issues related to the competition between two currencies in an agent-based computational economic model. The economic environment is a two-country overlapping generations economy with no restrictions on foreign currency holdings. Governments of both countries nance their de cits via seignorage. Agents make decisions about their savings and portfolio decisions. They use t...
متن کاملStores, Prices, and Currency Substitution
We study endogenous currency substitution in a decentralized trade environment. Sellers maximize profits from sales of imperfectly substitutable goods by posting prices in either one of two currencies. A unique symmetric equilibrium exists where goods are priced only in the local currency. This occurs if foreign trade is sporadic, there is sufficient but not excessive liquidity, and discounting...
متن کاملCurrency Substitution in Ukraine: Behavior of Households
Liberalization of foreign exchange regime and instability of national currency are among the major factors that shaped the level and strength of currency substitution in Ukraine. In this paper, a problem of currency substitution is addressed from the point of view of households. It is argued that the most conventional measure of currency substitution, namely the ratio of foreigncurrency denomin...
متن کاملWelfare Gains from Disination in an Economy with Currency Substitution
This paper builds a general equilibrium model with working capital and currency substitution and uses this model to assess welfare gains from disination. It is found that welfare gains from disination are higher when the baseline ination rate and the elasticity of substitution between foreign currency and domestic deposits are higher. Indeed the gains from disination can be quite large comp...
متن کاملHow does Political Violence Affect Currency Substitution? Evidence from Egypt
In this paper we estimate a time-series model of the financial asset portfolio shares in Egypt, distinguishing between assets of varying degrees of liquidity and between domestic currency and foreign currency deposits. While financial liberalization and financial stability are found to have encouraged domestic residents to increase the share of their portfolio composed of domestic currency asse...
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ژورنال
عنوان ژورنال: Economics Letters
سال: 1988
ISSN: 0165-1765
DOI: 10.1016/0165-1765(88)90129-2