Currency Substitution and Financial innovation

International Monetary Fund

No 1989/039, IMF Working Papers from International Monetary Fund

Abstract: This paper presents a cash-in-advance framework, with variable income velocity, where the domestic effects, as well as the international transmission, of financial innovation can be analyzed. In particular, the discussion emphasizes the role of currency substitution and of cross-border transfers of seigniorage in determining the general equilibrium effects of financial innovation.

Keywords: WP; foreign currency (search for similar items in EconPapers)
Pages: 24
Date: 1989-01-01
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