Dollar denominated accounts in Latin America during the 1990s

Pedro Gomis-Porqueras, Carlos Serrano and Alejandro Somuano

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we analyze the evolution of dollar-denominated accounts in Latin America and how they impact the stability of the banking system and the volatility of macroeconomic aggregates. Our findings reveal that dollar deposits are strongly influenced by depreciation expectations of the local currency even in an environment of fairly low inflation. We also find that having more dollar accounts increases the probability of future crises if the economy is already in a crisis. Finally, our findings suggest that for some macroeconomic aggregates there exists a positive correlation, in the long and short run, between their volatility and the volume of dollardenominated accounts in the banking system.

Keywords: dollar; accounts (search for similar items in EconPapers)
JEL-codes: E31 E44 (search for similar items in EconPapers)
Date: 2005
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Published in Journal of Economics and Finance; 29.2(2005): pp. 259-270

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Journal Article: Dollar-denominated accounts in Latin America during the 1990s (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:38370

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