The how, why and what questions of dollarization

Mengesha, Lula G. (2014) The how, why and what questions of dollarization. The Empirical Economics Letters, 13 (7). pp. 1-15. ISSN 1681- 8997

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Abstract or Summary

This paper unfolds the puzzles of why dollarization helps reduce inflation in some countries but not in some others and why it might alleviate or aggravate exchange rate volatility. It also reveals how dollarization affects the monetary policy transmission mechanisms and why the exchange rate channel is most effective in a dollarized economy. This paper finds the balance sheet effect, the purchasing power effect, currency substitution effect, currency mismatch and “ fear of floating” as some of the answers to the why, how and what questions posed in the study.

Item Type:Journal article
Keywords that describe the item:exchange rate, inflation, monetary policy, dollarization, central bank
Subjects:H Social Sciences > HC Economic History and Conditions
Divisions:Schools > Centre for Business, Information Technology and Enterprise > School of Business and Adminstration
ID Code:3270
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Deposited On:19 Aug 2014 04:47
Last Modified:19 Aug 2014 04:47

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