LIUC
The European Journal of Comparative Economics
ISSN: 1824-2979
LIUC
EJCE
Year: 2005, June. Volume: 2 - Issue: 1

The Measurement of Co-Circulation of Currencies and Dollarization in the Republic of Armenia

Hakob Zoryan

PDF file View this article

Start page: 41 - End page: 65

Keywords:
dollarization; currency substitution; asset substitution; foreign currency; transition economies; Armenia
Abstract:
This paper attempts to estimate the actual (de facto) level of dollarization in Armenia. "Co-circulation" involves the regular use of two or more currencies within an economy. The existence of an unknown amount of foreign currency in circulation makes the outcome of domestic monetary policy uncertain. The volume of foreign currency deposits is easily obtained from the official statistics. However, it is very hard to determine the stock of foreign currency in circulation. The effective money supply may be much larger than the domestic money supply and is subject to behavioral responses which are very different than the movements of the presently measured money supply. The purpose of this paper is to assess the level of dollarization, that is, to evaluate the size and/or proportion of foreign currency in the total money stock of Armenia as a highly dollarized country.

Jel code: E4
Jel code: E5
Jel code: F3
Jel code: G21
Jel code: P2
Jel code: P3
In case of problems please write an e-mail to secretariat.ejce@liuc.it
Supplemento a LIUC Papers
Direttore Responsabile: Piero Cavaleri
UniversitÓ Carlo Cattaneo - LIUC
C.so Matteotti, 22
21053 Castellanza (Va) - Italia
Registro stampa Tribunale di Busto Arsizio n. 11/93 del 11.06.93