{
  "title": "Currency Substitution in Developing Countries: An Introduction",
  "publication": "IMF Working Papers, May 1, 1992",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/currency-substitution-in-developing-countries-an-introduction-790",
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  "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 inflati",
  "sections": [
    {
      "heading": "Summary",
      "content": "- This paper reviews the main policy and analytical issues related to currency substitution in developing countries.\n- The paper discusses:\n  - whether currency substitution should be encouraged or not;\n  - how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs;\n  - the effects of changes in the rate of growth of the money supply on the real exchange rate;\n  - the interaction between inflationary finance and currency substitution;\n  - issues related to the empirical verification of the currency substitution hypothesis."
    },
    {
      "heading": "Major themes and analytical issues",
      "content": "- Currency substitution: examination of policy rationale for encouraging or discouraging currency substitution in developing countries.\n- Nominal anchors and stabilization: analysis of how currency substitution modifies the choice and effectiveness of nominal anchors in inflation stabilization programs.\n- Money supply growth and real exchange rate: exploration of the effects of changes in the rate of growth of the money supply on the real exchange rate.\n- Inflationary finance interaction: discussion of the interaction between inflationary finance and currency substitution.\n- Empirical verification: issues related to testing the currency substitution (substitution) hypothesis empirically."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Currencies, Demand for money, Dollarization, Foreign exchange, Inflation, Monetary policy, Money, Prices, Real exchange rates\n- Keywords: Currencies, currency substitutability, currency substitution, currency-substitution problem, Demand for money, Dollarization, dollarization process, domestic money, foreign currency, Inflation, inflation rate, medium of exchange, nominal interest rate, Real exchange rates, substitution hypothesis, WP\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/currency-substitution-in-developing-countries-an-introduction-790"
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    "Authors: Guillermo Calvo, Carlos A. Végh Gramont",
    "Published: May 1, 1992",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451845884.001",
    "This paper reviews the main policy and analytical issues related to currency substitution in developing countries.",
    "The paper discusses:",
    "Currency substitution: examination of policy rationale for encouraging or discouraging currency substitution in developing countries.",
    "Nominal anchors and stabilization: analysis of how currency substitution modifies the choice and effectiveness of nominal anchors in inflation stabilization programs.",
    "Money supply growth and real exchange rate: exploration of the effects of changes in the rate of growth of the money supply on the real exchange rate.",
    "Inflationary finance interaction: discussion of the interaction between inflationary finance and currency substitution.",
    "Empirical verification: issues related to testing the currency substitution (substitution) hypothesis empirically.",
    "Subject: Currencies, Demand for money, Dollarization, Foreign exchange, Inflation, Monetary policy, Money, Prices, Real exchange rates",
    "Keywords: Currencies, currency substitutability, currency substitution, currency-substitution problem, Demand for money, Dollarization, dollarization process, domestic money, foreign currency, Inflation, inflation rate, medium of exchange, nominal interest rate, Real exchange rates, substitution hypothesis, WP"
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