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This paper reviews the extensive theoretical and empirical literature on currency substitution. After discussing the ambiguity surrounding the definition of currency substitution, the paper illustrates the causes of substitutability of different currencies using a cash-in-advance model and a...
Persistent link: https://www.econbiz.de/10005124337
, the euro and the Chinese renminbi (RMB). It focuses on what we call China’s" dominance hypothesis", i.e. whether the …
Persistent link: https://www.econbiz.de/10009371469
resort and market maker of last resort activities. The fiscal authorities of the Euro Area should as a matter of urgency …
Persistent link: https://www.econbiz.de/10005656271
Fundamental changes in institutions during the transition from a centrally planned to a market economy present a formidable challenge to monetary policy decision makers. For the case of China, we examine the institutional changes in the monetary system during the process of transition and...
Persistent link: https://www.econbiz.de/10011083869
Recent time-series evidence has reconfirmed the forecasting ability of Swiss broad money. The same money demand studies and others, however, find that the income elasticity is greater than one. Such parameter estimates are difficult to reconcile with transactions demand theory. This study...
Persistent link: https://www.econbiz.de/10005661942
We explore the properties of velocity in a model where agents are required by law to use money to pay taxes, but not for any other private purchases. The model is applied to Brazil between 1975 and 1990. We show that the model mimics consumption velocity very closely during the high-inflation years.
Persistent link: https://www.econbiz.de/10005661982
A smooth progression from Stage Two to Stage Three of EMU requires that the type of policy planned for Stage Three should be foreshadowed in Stage Two. Two possibilities for that policy are monetary targeting or an interest rate policy feeding back on a nominal variable. The paper re-examines...
Persistent link: https://www.econbiz.de/10005666415
Money demand instability has been the subject of considerable attention in the recent literature. This paper examines the stability of velocity series for the United States and for five European countries (France, Germany, Italy, the Netherlands and the United Kingdom). A distribution-free test...
Persistent link: https://www.econbiz.de/10005666582
In this paper we argue that the relevant decision for the majority of US households is not the fraction of assets to be held in interest-bearing form, but whether to hold such assets at all (we call this ‘the decision to adopt’ financial technology). We show that the key variable governing...
Persistent link: https://www.econbiz.de/10005666631
Do immigrants have a higher demand for large denominated banknotes than natives? This micro study examines whether banknote orders for CHF 1,000 notes, a banknote used for storage purposes, is concentrated in Swiss municipalities with a high foreign-to-native ratio. The evidence for 251 Swiss...
Persistent link: https://www.econbiz.de/10008682884