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Sunday, May 3, 2020 | History

2 edition of Dollarization hysteresis and network externalities found in the catalog.

Dollarization hysteresis and network externalities

Bettina Peiers

Dollarization hysteresis and network externalities

theory and evidence from an informal Bolivian credit market

by Bettina Peiers

  • 79 Want to read
  • 22 Currently reading

Published by Federal Reserve Bank of Philadelphia, Economic Research Division in Philadelphia .
Written in English


Edition Notes

StatementBettina Peiers, Jeffrey M. Wrase.
SeriesEconomic research working paper series / Federal Reserve Bank of Philadelphia, Economic Research Division -- no.97-21, Economic research working paper (Federal Reserve Bank of Philadelphia, Economic Research Division) -- no.97-21.
ContributionsWrase, Jeffrey M.
ID Numbers
Open LibraryOL17146725M

  States faced with the loss of their territorial monopolies will give up defending national currencies; they'll outsource in either dollarization, formal dollarization, or monetary union. The logic stems from the familiar economies of scale associated with monetary use, the network externalities that we associate with money.   Hysteresis Begins Septem am Septem am The slump in the United States and other advanced economies is the .

The analysis of currency and maturity mismatches in sectoral balance sheets has increasingly become a regular element in the IMF's tool kit for surveillance in emerging market countries. This paper describes this so-called balance sheet approach and shows how it can be applied to detect vulnerabilities and shape policy advice. It also provides a broad-brushed overview of how balance sheet. Hysteresis and Economics Taking the economic past into account R. Cross M. Grinfeld H. Lamba — March 4, In this article the thinking behind the applications of notions of hysteresis to economic systems is discussed. In particular, it is explained why the idea that many aspects of economic systems are hysteretic is a plausible and.

Hysteresis and Economics Taking the economic past into account R. Cross M. Grinfeld H. Lamba — Septem The goal of this article is to explore the rationale underlying the application of hysteresis to economic models. In particular, we explain why .   Austerity and Hysteresis J am J am Larry Ball has an important paper documenting, on a consistent basis, a very disturbing point: if you believe official estimates of potential output, the Great Recession and its aftermath have done incredible damage, not just to short-run output and employment, but to long-run.


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Dollarization hysteresis and network externalities by Bettina Peiers Download PDF EPUB FB2

Get this from a library. Network externalities and dollarization hysteresis: the case of Russia. [Nienke Oomes; International Monetary Fund.

Research Department.] -- Dollarization in Russia increased rapidly during the early s, but failed to come down in the second half of the s in spite of exchange rate stabilization. To explain this "dollarization.

Downloadable. Dollarization in Russia increased rapidly during the early s, but failed to come down in the second half of the s 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 generate multiple stable steady states for the dollarization ratio.

Downloadable. Dollarization in Bolivia rose rapidly immediately after the hyperinflation and currency crisis episode that took place between andbut failed to reduce and, in fact, continued increasing the following years. In order to explain this dollarization hysteresis, this document proposes and estimates a model, based in the work of Oomes (), where network externalities can.

The explanations for the ratchet effect can be grouped into two main categories: 1) Network externalities: if economic agents can choose among several currencies for transactions they will prefer the currency that is already widely used in the economy; therefore, if dollarization reaches sufficiently high levels during a period of high Cited by: The chapter examines the extent, causes and consequences of transition countries’ use of foreign currency as a co-circulating medium of exchange and store of value.

Using new estimates of foreign cash in circulation, we obtain unique measures of currency substitution, asset substitution, and dollarization, and examine the consequences of network externalities for hysteresis and irreversibility. Currency Substitution and Network Externalities Dollarization hysteresis is shown to occur when the expected volatility of the inflation rate is high in relation to that of the real exchange.

Unofficial dollarization in Latin America: Currency substitution, network externalities and irreversibility Article (PDF Available) June with Reads How we measure 'reads'.

This chapter examines the extent to which the U.S. dollar has become the de facto currency in Latin America. The amounts of U.S. dollars in circulation in various Latin American countries were estimated.

Argentina had the highest level of de facto dollarization. It represents a classic case of hysteresis, suggesting that once a threshold level of dollarization is reached, it may be maintained.

nation of dollarization hysteresis is the existence of network externalities in the demand for currency. A new theoretical model is developed, and is estimated using a new source of data on dollar currency holdings. Evidence is found for the existence of multiple steady state Cited by: 4.

Fernández Tellería BX () Dollarization hysteresis network externalities and the “past legacy” effect: the case of Bolivia. Banco Central de Bolivia, Revista de Author: Anna Krupkina, Alexey A. Ponomarenko. Another cost of dollarization is the loss of sei- gnorage for the client country.

However, this loss is not a social waste, but rather a redistribution between the countries. In principle, the anchor could return the seignorage to the client.

In fact, the allocation of seignorage can be part of com- pensation schemes between anchors and Size: KB. We illustrate that the degree of dollarization differs considerably by region, higher in the metropolitan area and lower in rural areas.

We also find that the prevalence of dollar circulation differs from one commodity supply chain to another. These imply that network externalities influence the choices of currency by households and : Ken Odajima. This book sheds light on the dollarization trends of four transitional economies in Southeast Asia: Cambodia, Lao PDR, Myanmar, and Vietnam.

Moving beyond the tendency to focus on the Latin American experience of dollarization and prolonged high inflation, the chapters in this book compare how payment dollarization has been more persistent than other types of dollarization in this region due.

Bettina Peiers and Jeffrey M. Wrase, "Dollarization Hysteresis and Network Externalities: Theory and Evidence from an Informal Bolivian Credit Market" This paper considers network externalities from currency acceptability as a determinant of observed persistence of dollarization in.

Hysteresis: In economics, hysteresis refers to an event in the economy that persists into the future, even after the factors that led to that event have been removed.

Unemployment rate and Author: Will Kenton. A simple model of currency substitution is developed in which the private cost of performing transactions in the foreign currency depends upon the aggregate degree of dollarization.

This feature generates multiple steady states and hysteresis in an otherwise standard. “Network Externalities and Dollarization Hysteresis: The Case of Russia,” IMF Working Paper 03/96, May Article in journal – popular scientific “Gender Pay Gaps in the EBRD Region” (with Nato Kurshitashvili, Barbara Rambousek and Paulina Stepien), London: European Bank for Reconstruction and Development, May In empirics, hysteresis takes the form of a break, a lag or a unit root.

However, there is so far no model to explain the effects of temporary shocks on the growth rate of the economy. Conclusion: there is a need of endogenous growth models with hysteresis properties. Tapio Palokangas, Univ.

of Helsinki Economic growth with hysteresisFile Size: KB. Zaid Alberzinji, Member, PhD Dissertation Committee, Department of Economics, University of Utah, Dissertation title: "Deposit Dollarization Dynamics in a Model of Network Externalities and Hysteresis: The Case of Argentina".

successfully defended. Hysteresis Used to characterize a lagging effect. Firms may fail to enter markets that appear attractive, or firms that are once invested in a market may persist in operating at a loss.

The effect is characteristic of investments with high entry and exit costs along with high uncertainty. Hysteresis In economics, a situation or indicator that persists.

Network externalities provide a straightforward and convincing explanation for the persistence of high dollarization ratios in countries with low inflation. It is also plausible that the growth of global economic integration, the advent of electronic banking, and learning-by-experience make it easier to engage in currency substitution today Cited by: 6.Abstract: The goal of this study is the derivation and application of a direct characterization of the inverse of the covariance matrix central to portfolio analysis.

As argued below, such a specification of the inverse, in terms of a few primitive constructs, helps clarify the determinants of such key concepts as (1) the optimal holding of a given risky asset, (2) the slope of the risk-return.ADVANTAGES AND DISADVANTAGES OF.

DOLLARIZATION IN ECUADOR. Assuming that the conditions required for the dollarization process are fulfilled in the Ecuadorian case, which has not been proven so far, it has some advantages and disadvantages that are important to analyze in this specific case.

The main advantages foreseeable are: control of.