Browsing by Subject "Dollarization"

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    Analyzing the persistence of currency substitution using a ratchet variable: the Turkish case
    (Routledge, 2003) Us, V.
    Although previous studies on currency substitution in Turkey confirm the existence of currency substitution, these works ignore whether this process reached an irreversible stage or not. This paper analyzes the persistence of currency substitution in Turkey through inclusion of a ratchet variable, the past peak value of the currency substitution. Results using an autoregressive distributed lag (ARDL) approach suggest that currency substitution during 1990-93 is not persistent enough to be irreversible. During 1995-99, even though currency substitution in the narrow sense is persistent, currency substitution in the broader sense is not irreversible. Therefore, there is still room for effective monetary policy.
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    Dedollarization in Turkey after decades of dollarization: a myth or reality?
    (Elsevier BV, 2007) Özcan, K. M.; Us, V.
    The paper analyzes dollarization in the Turkish economy given the evidence on dedollarization signals. On conducting a Vector Autoregression (VAR) model, the empirical evidence suggests that dollarization has mostly been shaped by macroeconomic imbalances as measured by exchange rate depreciation volatility, inflation volatility and expectations. Furthermore, the generalized impulse response function (IRF) analysis, in addition to the analysis of variance decomposition (VDC) gives support to the notion that dollarization seems to sustain its persistent nature, thus hysteresis still prevails. Hence, unfavorable macroeconomic conditions apparently contribute to dollarization while dollarization itself contains inertia. Furthermore, dedollarization that presumably started after 2001 has lost headway after May 2006. Thus, it seems too early to conclude that dollarization changed its route to dedollarization. © 2007 Elsevier B.V. All rights reserved.