Dollarization and its Long-run Determinants in Turkey

Impact of dollarisation on exchange rate volatility and rational choice of currency regime: Evidence from two EU candidate countries

“…Malovic (2015), for instance, therefore maintains that Serbia has probably foregone all the textbook benefits of managed float, due to the absence or ambiguity of overall development, industrial and export promotion policies, in that there is no grown up and qualitatively mature enough production potential which wouldmuch like a sail-catch the wind provided by managed (real) depreciation of national currency. On the other hand, Civcir (2003) in the case of Turkey, also finds interest rate (inflation) differential and (un)expected but unfavourable exchange rate movements to be the dominant variables in determining dollarisation extent. However, Turkey is characterised by another peculiarity: much of its imports are denominated in euros, whereas slightly larger chunk of ist exports is denominated in US dollars.…”

Financial Dollarization and Currency Substitution: An Empirical Study for Bolivia

“…The inflation differential is a variable often used in the currency substitution literature as a proxy for exchange rate depreciation expectations (Clements andSchwattz, 1993 andCivcir, 2003). This variable has a clear downward trend for Bolivia since the structural reforms in the aftermath of the hyperinflation crisis (See Figure 2 in Appendix).…”

Dedollarization in Turkey after decades of dollarization: A myth or reality?

“…There are now several studies on the issue of dollarization in the Turkish economy. 2 While some of these studies focus on analyzing the determinants of dollarization [1][2][3][4][5]; others inquire about the hysteresis nature of dollarization (ratchet effect), i.e. whether dollarization ratios have reached an irreversible stage or not [6,7].…”