Macroeconomic Adjustment in a Highly Dollarized Economy: The Case of Cambodia

 
Author/Editor: de Zamaróczy, Mario ; Sa, Sopanha
 
Publication Date: May 01, 2002
 
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Summary: Cambodia became dollarized suddenly in the early 1990s, as a result of massive dollar inflows stemming from a postconflict situation. Considering that the amount of dollars in circulation is unusually high, we attempt to estimate the true degree of dollarization empirically. Our results show that Cambodia has been virtually fully dollarized since 1995. Against a background of severe institutional limitations, the authorities have implemented in recent years policies akin to those of a de facto currency board arrangement, in particular with respect to fiscal discipline. The paper concludes that this policy mix has been appropriate for Cambodia's circumstances.
 
Series: Working Paper No. 02/92
Subject(s): Adjustment policy | Cambodia | Dollarization | Currency substitution | Exchange rates | Currency boards

Author's Keyword(s): Dollarization | Currency Substitution | Co-Currency Circulation | Kalman Filter | Exchange Rates | Currency Board Arrangement
 
English
Publication Date: May 01, 2002
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA0922002 Pages: 53
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