The Transactions Demand for Money in the Presence of Currency Substitution: Evidence from Vietnam.
Currency substitution - the use of foreign money to finance transactions between domestic residents - is widespread in low income and transition economies. Traditionally, however, empirical models of the demand for money tend to concentrate on the portfolio motive for holding foreign currency, while...
| Main Authors: | , , |
|---|---|
| פורמט: | Working paper |
| שפה: | English |
| יצא לאור: |
CERDI
2003
|
| _version_ | 1826303090816450560 |
|---|---|
| author | Adam, C Goujon, M Jeanneney, S |
| author_facet | Adam, C Goujon, M Jeanneney, S |
| author_sort | Adam, C |
| collection | OXFORD |
| description | Currency substitution - the use of foreign money to finance transactions between domestic residents - is widespread in low income and transition economies. Traditionally, however, empirical models of the demand for money tend to concentrate on the portfolio motive for holding foreign currency, while maintaining the assumption that the income elasticity of demand for domestic money is invariant to the degree of currency substitution. A simple re-specification of the demand for money is offered which more accurately reflects the process of currency substitution by allowing for a variable income elasticity of demand for domestic money. This specification is estimated for Vietnam in the 1990s. Using a standard cointegration framework evidence is found for currency substitution only in the long-run but well-defined wealth effects operating in the short-run. |
| first_indexed | 2024-03-07T05:57:21Z |
| format | Working paper |
| id | oxford-uuid:eafd1e26-fe70-4531-8097-f12d8f288fef |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T05:57:21Z |
| publishDate | 2003 |
| publisher | CERDI |
| record_format | dspace |
| spelling | oxford-uuid:eafd1e26-fe70-4531-8097-f12d8f288fef2022-03-27T11:06:15ZThe Transactions Demand for Money in the Presence of Currency Substitution: Evidence from Vietnam.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:eafd1e26-fe70-4531-8097-f12d8f288fefEnglishDepartment of Economics - ePrintsCERDI2003Adam, CGoujon, MJeanneney, SCurrency substitution - the use of foreign money to finance transactions between domestic residents - is widespread in low income and transition economies. Traditionally, however, empirical models of the demand for money tend to concentrate on the portfolio motive for holding foreign currency, while maintaining the assumption that the income elasticity of demand for domestic money is invariant to the degree of currency substitution. A simple re-specification of the demand for money is offered which more accurately reflects the process of currency substitution by allowing for a variable income elasticity of demand for domestic money. This specification is estimated for Vietnam in the 1990s. Using a standard cointegration framework evidence is found for currency substitution only in the long-run but well-defined wealth effects operating in the short-run. |
| spellingShingle | Adam, C Goujon, M Jeanneney, S The Transactions Demand for Money in the Presence of Currency Substitution: Evidence from Vietnam. |
| title | The Transactions Demand for Money in the Presence of Currency Substitution: Evidence from Vietnam. |
| title_full | The Transactions Demand for Money in the Presence of Currency Substitution: Evidence from Vietnam. |
| title_fullStr | The Transactions Demand for Money in the Presence of Currency Substitution: Evidence from Vietnam. |
| title_full_unstemmed | The Transactions Demand for Money in the Presence of Currency Substitution: Evidence from Vietnam. |
| title_short | The Transactions Demand for Money in the Presence of Currency Substitution: Evidence from Vietnam. |
| title_sort | transactions demand for money in the presence of currency substitution evidence from vietnam |
| work_keys_str_mv | AT adamc thetransactionsdemandformoneyinthepresenceofcurrencysubstitutionevidencefromvietnam AT goujonm thetransactionsdemandformoneyinthepresenceofcurrencysubstitutionevidencefromvietnam AT jeanneneys thetransactionsdemandformoneyinthepresenceofcurrencysubstitutionevidencefromvietnam AT adamc transactionsdemandformoneyinthepresenceofcurrencysubstitutionevidencefromvietnam AT goujonm transactionsdemandformoneyinthepresenceofcurrencysubstitutionevidencefromvietnam AT jeanneneys transactionsdemandformoneyinthepresenceofcurrencysubstitutionevidencefromvietnam |