40 research outputs found
On the determinants of Brazil's manufactured exports : an empir. analysis.
IndustriegĂĽterauĂźenhandel; Internationaler Wettbewerb; AuĂźenwirtschaftspolitik; Brasilien;
Currency substitution, portfolio diversification and money demand
We extend the Thomas (1985) dynamic optimising model of money demand and
currency substitution to the case in which the individual has restricted or no access
to foreign currency denominated bonds. In this case Currency Substitution decisions
and Asset Substitution decisions are not separable. The results obtained suggest that
the significance of an expected exchange rate depreciation term in the demand for
domestic money provides a valid test for the presence of currency substitution.
Applying this approach to six Latin American countries, we find evidence of currency
substitution in Colombia, Dominican Republic and Venezuela, but not in Brazil and
Chile