Currency Substitution in Developing Countries : An Introduction

Author/Editor:

Guillermo Calvo ; Carlos A. Végh Gramont

Publication Date:

May 1, 1992

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper reviews the main policy and analytical issues related to currency substitution in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs; third, the effects of changes in the rate of growth of the money supply on the real exchange rate; fourth, the interaction between inflationary finance and currency substitution; and, finally, issues related to the empirical verification of the currency substitution hypothesis.

Series:

Working Paper No. 92/40

Subject:

English

Publication Date:

May 1, 1992

ISBN/ISSN:

9781451845884/1018-5941

Stock No:

WPIEA0401992

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

32

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