Foreign currency debt and expectations

Benhima, Kenza (University of Lausanne and CEPR) ; Blengini, Isabella (Ecole hôtelière de Lausanne, HES-SO // University of Applied Sciences Western Switzerland) ; Merrouche, Ouarda (University Paris-Nanterre, France)

The paper explores the hypothesis that the dollarization of liabilities in emerging market economies results from the different expectations that domestic firms and international investors may have on the stability of the exchange rate. We show that a certain degree of debt dollarization might be observed, if the fundamentals are relatively strong and domestic agents have an informational advantage on the state of the economy. Transparency on the international markets and policy implications of our findings are briefy discussed.


Keywords:
Conference Type:
full paper
Faculty:
Economie et Services
School:
EHL
Subject(s):
Economie/gestion
Publisher:
Rabat, Morroco, 23-24 April 2018
Date:
2018-04
Rabat, Morroco
23-24 April 2018
Pagination:
33 p.
Published in:
Proceedings of the Journées Internationales de Macroéconomie et de Finance, 2018
Appears in Collection:

Note: The status of this file is: restricted


 Record created 2018-10-26, last modified 2019-06-11

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