Euroization Drivers and Effective Policy Response: An Application to the case of Albania

Valle, Guido della; Kota, Vasilika; Veyrune, Romain; Cabezon, Ezequiel; Guo, Shaoyu

doi:10.5089/9781484338728.001

Cited by 6 publications

(9 citation statements)

References 7 publications

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“…The greater the expected inflation volatility relative to that of the real exchange rate, the greater the share of foreign currency deposits in the MVP. The MVP ratio approximates actual dollarization in many countries (Della Valle et al, 2018).…”

Section: Macroeconomic Factorsmentioning

confidence: 99%

“…As Basso et al (2010) note, their model can be used to predict the effect of remittances, although this is not covered in the paper and empirical analysis. Della Valle (2018) shows that remittances positively affect total deposit dollarization.…”

Section: Structural Factorsmentioning

confidence: 99%

“…Della Valle et al (2018) are among the pioneers concerned directly with the empirical estimation of the optimal level of foreign currency in an economy. The authors fit a country panel regression of deposit dollarization on a list of dollarization factors, and then compute fitted values using estimated coefficients but replacing actual macroeconomic values with those that reflect a history of good macroeconomic management (i.e., low volatility of inflation and the exchange rate).…”

Section: Estimation Of the Natural Dollarization Levelmentioning

confidence: 99%

“…Financial dollarization in Ukraine is high but not extreme (Figure 1). In a recent analysis of comparable countries, low-dollarization countries had dollarization levels of 10-20% over 2009-2016, while highly dollarized countries had levels of 40-80% (Della Valle et al, 2018). Ukraine had a dollarization rate of 44%, placing it into the lower end of 4 More detailed information is available on the website of the World Bank.…”

Section: Background For Financial Dollarization In Ukrainementioning

confidence: 99%

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Untitled

2019

VNBU

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This paper studies the transmission of foreign output shocks to real activity in Ukraine through international trade. We employ a global vector auto regressive (GVAR) model that captures about 80% of the world economy and incorporates time-varying trade and financial weights. According to our estimates, a mild recession in the US of a 1% drop in output generates a substantial recession in Ukraine of about 2.2%. A similar drop of output in the euro area and Russia translates to a drop in output of about 1.7% in Ukraine. Finally, the same drop of output in CEE, China, or the CIS leads to an output decline of about 0.4% in Ukraine. Meanwhile, Ukraine's response to euro area output shock has been steadily increasing over the last couple of decades due to changes in global trade flows. Ukraine's sensitivity to shocks in the US and euro area is notably strengthened by indirect trade effects, while the response to shocks from emerging economies, i.e., China, CEE, the CIS, and partially Russia, is mainly determined by bilateral trade linkages.

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Section: Macroeconomic Factorsmentioning

confidence: 99%

Section: Structural Factorsmentioning

confidence: 99%

Section: Estimation Of the Natural Dollarization Levelmentioning

confidence: 99%

Section: Background For Financial Dollarization In Ukrainementioning

confidence: 99%

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2019

VNBU

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“…Macroeconomic structural policies, adequate monetary conditions and prudential measures, which are tightly intertwined in the pursuit of de-dollarization, should be coordinated (Garcia-Escribano and Sosa, 2011;Della Valle et al, 2018). The literature on the determinants of financial dollarization highlights a variety of factors ranging from inflation and exchange rate fluctuations to structural factors, with the effectiveness of prudential policies in mitigating dollarization risks a topic that needs further assessment.…”

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confidence: 99%

Taming Financial Dollarization: Determinants and Effective Policies – The Case of Uruguay

Vargas

2023

IMF Working Papers

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The effect of financial development and remittances on economic growth

Rehman

Hysa

2021

Cogent Economics & Finance

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The purpose of this study is to examine the effect of financial development and remittances on economic growth across six Western Balkan countries (WBC) using panel data from 2000 to 2017. Previous studies have neglected the effect of financial development and remittances on economic growth with regard to WBC. Based on system GMM analysis, we found that financial development (broad money stock ratio) and remittances shows positive impact on economic growth across WBC. However, the interaction of financial development and remittances provide a significant and negative effect on economic growth. The results imply that remittances together with financial development substitutes the economic growth of WBC. In order to expand the financial system in the WBC, policies targeted to develop the non-deposit financial institutions and using the narrow interest rate margin policy to encourage investment and thus high economic growth.

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Euroization Drivers and Effective Policy Response: An Application to the case of Albania

Cited by 6 publications

References 7 publications

Untitled

Untitled

Taming Financial Dollarization: Determinants and Effective Policies – The Case of Uruguay

The effect of financial development and remittances on economic growth

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