Currency Substitution in Egypt and the Yemen Arab Republic: A Comparative Quantitative Analysis

El-Erian, Mohamed A.

doi:10.2139/ssrn.884775

Cited by 8 publications

(9 citation statements)

References 1 publication

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…\J For evidence on currency substitution in small open economies, see, for instance, Ortiz (1983), Ramirez-Rojas (1985), El-Erian (1988), andCanto andNickelsburg (1989).…”

Section: Introductionmentioning

confidence: 99%

Credibility and the Dynamics of Stabilization Policy: A Basic Framework

Calvo

Gramont²

1990

IMF Working Papers

View full text Add to dashboard Cite

show abstract

“…\J For evidence on currency substitution in small open economies, see, for instance, Ortiz (1983), Ramirez-Rojas (1985), El-Erian (1988), andCanto andNickelsburg (1989).…”

Section: Introductionmentioning

confidence: 99%

Credibility and the Dynamics of Stabilization Policy: A Basic Framework

Calvo

Gramont²

1990

IMF Working Papers

View full text Add to dashboard Cite

show abstract

“…The effects of these variables on currency substitution have been adequately documented in the literature. For example, some existing studies found that inflation and inflation variability exert a positive impact on currency substitution (El-Erian, 1988; Neanidis & Savva, 2006). In the same way, many studies have confirmed the positive effects of the exchange rate and exchange rate volatility on currency substitution (Kalyoncu et al, 2015; Yinusa & Akinlo, 2008).…”

Section: Theoretical and Empirical Issuesmentioning

confidence: 99%

How Does Corruption Affect Currency Substitution? Evidence from Nigeria

Enisan

2022

Journal of Development Policy and Practice

View full text Add to dashboard Cite

The article examines the impact of corruption on currency substitution in Nigeria over the 1986–2017 period, using the auto-regressive distributed lag and vector error-correction approaches. The results indicate that corruption and currency substitution are co-integrated. Moreover, corruption promotes currency substitution in the short run, which confirms the safe-haven hypothesis. An increase in income leads to an increase in currency substitution, which further supports the safe-haven hypothesis. Exchange rate depreciation tends to promote currency substitution, especially in the short-run. Finally, inflation and interest rate promote currency substitution in Nigeria. Therefore, it would be necessary for policymakers to explore ways of reducing corruption, ensure macroeconomic stability, foster the equitable distribution of growth and promote productivity to enhance savers’ confidence in the local currency.

show abstract

“…The model presented in this paper is based on a simple structural model as proposed by El-Erian (1988), which in turn resembles the models used by Ramirez-Rojas (1985) and Rojas-Suarez (1991), with the exception that it adds a variable measuring interest rate differentials on deposits. The model we use views the degree of currency substitution as a function of exchange rate expectations, interest rate differentials, and a stock adjustment mechanism that is represented by a lagged dependent variable.…”

Section: An Econometric Model Of Currency Substitution In Boliviamentioning

confidence: 99%