Financial dollarization

Autores
Ize, Alain; Levy Yeyati, Eduardo
Año de publicación
2000
Idioma
español castellano
Tipo de recurso
documento de conferencia
Estado
versión publicada
Descripción
This paper presents a portfolio model of financial intermediation in which currency choice is determined by hedging decisions on both sides of a bank’s balance sheet. Minimum variance portfolio (MVP) allocations are found to provide a natural benchmark to estimate the scope for dollarization of bank deposits and loans as a function of macroeconomic uncertainty. Dollarization hysteresis is shown to occur when the expected volatility of the inflation rate is high in relation to that of the real exchange rate. The evidence shows that MVP dollarization generally approximates actual dollarization closely for a broad sample of countries. Policy implications are explored.
Departamento de Economía
Materia
Ciencias Económicas
dollarization
financial intermediation
asset substitution
dinero
economía monetaria
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by/3.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/33932
Acceder
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oai_identifier_str oai:sedici.unlp.edu.ar:10915/33932
network_acronym_str SEDICI
repository_id_str 1329
network_name_str SEDICI (UNLP)
spelling Financial dollarizationIze, AlainLevy Yeyati, EduardoCiencias Económicasdollarizationfinancial intermediationasset substitutiondineroeconomía monetariaThis paper presents a portfolio model of financial intermediation in which currency choice is determined by hedging decisions on both sides of a bank’s balance sheet. Minimum variance portfolio (MVP) allocations are found to provide a natural benchmark to estimate the scope for dollarization of bank deposits and loans as a function of macroeconomic uncertainty. Dollarization hysteresis is shown to occur when the expected volatility of the inflation rate is high in relation to that of the real exchange rate. The evidence shows that MVP dollarization generally approximates actual dollarization closely for a broad sample of countries. Policy implications are explored.Departamento de Economía2000-05info:eu-repo/semantics/conferenceObjectinfo:eu-repo/semantics/publishedVersionObjeto de conferenciahttp://purl.org/coar/resource_type/c_5794info:ar-repo/semantics/documentoDeConferenciaapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/33932spainfo:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/jemi/2000/trabajo3.pdfinfo:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by/3.0/Creative Commons Attribution 3.0 Unported (CC BY 3.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-09-10T12:02:09Zoai:sedici.unlp.edu.ar:10915/33932Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-09-10 12:02:09.425SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Financial dollarization
title Financial dollarization
spellingShingle Financial dollarization
Ize, Alain
Ciencias Económicas
dollarization
financial intermediation
asset substitution
dinero
economía monetaria
title_short Financial dollarization
title_full Financial dollarization
title_fullStr Financial dollarization
title_full_unstemmed Financial dollarization
title_sort Financial dollarization
dc.creator.none.fl_str_mv Ize, Alain
Levy Yeyati, Eduardo
author Ize, Alain
author_facet Ize, Alain
Levy Yeyati, Eduardo
author_role author
author2 Levy Yeyati, Eduardo
author2_role author
dc.subject.none.fl_str_mv Ciencias Económicas
dollarization
financial intermediation
asset substitution
dinero
economía monetaria
topic Ciencias Económicas
dollarization
financial intermediation
asset substitution
dinero
economía monetaria
dc.description.none.fl_txt_mv This paper presents a portfolio model of financial intermediation in which currency choice is determined by hedging decisions on both sides of a bank’s balance sheet. Minimum variance portfolio (MVP) allocations are found to provide a natural benchmark to estimate the scope for dollarization of bank deposits and loans as a function of macroeconomic uncertainty. Dollarization hysteresis is shown to occur when the expected volatility of the inflation rate is high in relation to that of the real exchange rate. The evidence shows that MVP dollarization generally approximates actual dollarization closely for a broad sample of countries. Policy implications are explored.
Departamento de Economía
description This paper presents a portfolio model of financial intermediation in which currency choice is determined by hedging decisions on both sides of a bank’s balance sheet. Minimum variance portfolio (MVP) allocations are found to provide a natural benchmark to estimate the scope for dollarization of bank deposits and loans as a function of macroeconomic uncertainty. Dollarization hysteresis is shown to occur when the expected volatility of the inflation rate is high in relation to that of the real exchange rate. The evidence shows that MVP dollarization generally approximates actual dollarization closely for a broad sample of countries. Policy implications are explored.
publishDate 2000
dc.date.none.fl_str_mv 2000-05
dc.type.none.fl_str_mv info:eu-repo/semantics/conferenceObject
info:eu-repo/semantics/publishedVersion
Objeto de conferencia
http://purl.org/coar/resource_type/c_5794
info:ar-repo/semantics/documentoDeConferencia
format conferenceObject
status_str publishedVersion
dc.identifier.none.fl_str_mv http://sedici.unlp.edu.ar/handle/10915/33932
url http://sedici.unlp.edu.ar/handle/10915/33932
dc.language.none.fl_str_mv spa
language spa
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/jemi/2000/trabajo3.pdf
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
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Creative Commons Attribution 3.0 Unported (CC BY 3.0)
eu_rights_str_mv openAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by/3.0/
Creative Commons Attribution 3.0 Unported (CC BY 3.0)
dc.format.none.fl_str_mv application/pdf
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instname_str Universidad Nacional de La Plata
instacron_str UNLP
institution UNLP
repository.name.fl_str_mv SEDICI (UNLP) - Universidad Nacional de La Plata
repository.mail.fl_str_mv alira@sedici.unlp.edu.ar
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score 12.993085

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