Persistence of dollarization after price stabilization

• 成果类型: Article
• 署名作者: Rappoport, Veronica
• 署名单位: Columbia University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2009.09.002
• 发表日期: 2009
• 页码: 979-989
• 关键词: Dollarization; Nonexclusive contracts; multiple equilibria; Underinsurance

摘要

Credit contracts in developing countries are often denominated in foreign currencies, even after many of these economies succeeded in controlling inflation. This paper proposes a new interpretation of this apparent puzzle based on the demand for insurance against real shocks: the fact that devaluations occur more frequently in adverse states of the world provides a motive for holding dollar assets. This approach implies a complementarity between the optimal monetary policy and the currency denomination of contracts. When a large proportion of liabilities is denominated in a foreign currency, the optimal exchange rate volatility is low, which reinforces the demand for dollar assets. (C) 2009 Elsevier B.V. All rights reserved.