Secondary currency: An empirical analysisMariana Colacelli and David J.H. Blackburn Journal of Monetary Economics, 2009, vol. 56, issue 3, pages 295-308 Abstract: Many cases exist of multiple currency usage throughout history. As two leading examples, secondary currencies were widespread during both the Great Depression in the United States and the 2002 recession in Argentina. What are the determinants of multiple currency usage and what is the effect on economic activity? Both issues are empirically addressed using individual-level surveys collected by the authors in Argentina during 2002 and 2003. The evidence supports the theoretically predicted determinants of secondary currency acceptability put forth in monetary theory. In particular, findings show that the acceptability of the secondary currency increases when the supply of national currency is low, the relative transaction cost of the secondary currency is low, and the individual trading technologies are less effective. Moreover the acceptability of the secondary currency has real effects on economic activity. Among those who use the secondary currency the monthly income gain is more than 15% of the average Argentine's monthly income. Excluding trades of used goods, this amounts to a 0.6% increase in GDP. Keywords: Secondary; currency; Monetary; theory; Exchange; clubs; Argentina; Propensity; score (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:eee:moneco:v:56:y:2009:i:3:p:295-308 Access Statistics for this article Journal of Monetary Economics is edited by R. G. King and C. I. Plosser More articles in Journal of Monetary Economics from Elsevier |
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