Currency substitution and the transactions demand for money in Vietnam
Michael Goujon (),
Sylviane Guillaumont Jeanneney () and
Christopher Adam ()
No 200228, Working Papers from CERDI
We estimate the demand for money in Vietnam during the 1990s within a framework which distinguishes between currency substitution and portfolio dimensions of dollarization. This leads to a representation for the demand function in which the long-run income elasticity of demand is no longer constant but is a function of the expected rate of depreciation. We find evidence for currency substitution only in the long-run, and for portfolio effects only in the short-run. We interpret this as being consistent with the existence of costs associated with changing the transactions technology.
Keywords: Dollarization; Currency Substitution; Demand for Money; Vietnam. (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:cdi:wpaper:193
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