{
  "title": "Overshooting and Dollarization in the Democratic Republic of the Congo",
  "publication": "IMF Working Papers, May 1, 2003",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/overshooting-and-dollarization-in-the-democratic-republic-of-the-congo-16544",
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  "summary": "The paper develops an interpretation of volatile exchange rate movements in a dollarized economy with very high rates of inflation.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- The paper develops an interpretation of volatile exchange rate movements in a dollarized economy with very high rates of inflation.\n- Differences between the rate of inflation and currency depreciation (over- or undershooting of the exchange rate) are treated as a proxy for changes in the relative demand for domestic and foreign currency.\n- A simple model is calibrated for the Democratic Republic of the Congo in the 1990s and is used to derive estimates of the rate of dollarization."
    },
    {
      "heading": "Model and empirical approach",
      "content": "- Uses a simple calibrated model tailored to the Democratic Republic of the Congo in the 1990s.\n- Interprets exchange rate over- or undershooting relative to inflation as indicating shifts in money demand between domestic and foreign currency.\n- Calibration is employed to translate observed inflation–depreciation differences into estimates of dollarization."
    },
    {
      "heading": "Key findings and estimates",
      "content": "- Volatile exchange rate movements in a highly dollarized, high-inflation environment can be explained by relative demand shifts for domestic versus foreign currency.\n- The model is used to derive estimates of the rate of dollarization for the Democratic Republic of the Congo in the 1990s.\n- (No numeric dollarization estimates are reported on this page; see the Working Paper for detailed quantitative results.)"
    },
    {
      "heading": "Policy relevance and themes",
      "content": "- Addresses implications for monetary policy in dollarized economies experiencing very high inflation.\n- Relevant subject areas: Currencies; Demand for money; Dollarization; Exchange rates; Foreign exchange; Inflation; Monetary policy; Money; Prices.\n- Regional and topical focus includes: Central Africa; Congo; Sub-Saharan Africa; WAEMU currency zone; Zaïre.\n\n---\n\n Content in this bundle\n\n- Overshooting and Dollarization in the Democratic Republic of the Congo - WP/03/105\n  - Overshooting and Dollarization in the Democratic Republic of the Congo - WP/03/105 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Overshooting and Dollarization in the Democratic Republic of the Congo - WP/03/105 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/overshooting-and-dollarization-in-the-democratic-republic-of-the-congo-16544"
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    "Authors: Philippe Beaugrand",
    "Published: May 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451852844.001",
    "The paper develops an interpretation of volatile exchange rate movements in a dollarized economy with very high rates of inflation.",
    "Differences between the rate of inflation and currency depreciation (over- or undershooting of the exchange rate) are treated as a proxy for changes in the relative demand for domestic and foreign currency.",
    "A simple model is calibrated for the Democratic Republic of the Congo in the 1990s and is used to derive estimates of the rate of dollarization.",
    "Uses a simple calibrated model tailored to the Democratic Republic of the Congo in the 1990s.",
    "Interprets exchange rate over- or undershooting relative to inflation as indicating shifts in money demand between domestic and foreign currency.",
    "Calibration is employed to translate observed inflation–depreciation differences into estimates of dollarization.",
    "Volatile exchange rate movements in a highly dollarized, high-inflation environment can be explained by relative demand shifts for domestic versus foreign currency.",
    "The model is used to derive estimates of the rate of dollarization for the Democratic Republic of the Congo in the 1990s.",
    "(No numeric dollarization estimates are reported on this page; see the Working Paper for detailed quantitative results.)",
    "Addresses implications for monetary policy in dollarized economies experiencing very high inflation.",
    "Relevant subject areas: Currencies; Demand for money; Dollarization; Exchange rates; Foreign exchange; Inflation; Monetary policy; Money; Prices.",
    "Regional and topical focus includes: Central Africa; Congo; Sub-Saharan Africa; WAEMU currency zone; Zaïre.",
    "**Overshooting and Dollarization in the Democratic Republic of the Congo - WP/03/105**"
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