publication . Doctoral thesis . 2017

Essays on Currency Competition, Institutional Restrictions and Exchange Rates

Bhattacharya, Arghya;
Open Access English
  • Published: 01 Jan 2017
  • Publisher: eScholarship, University of California
  • Country: United States
This dissertation consists of three essays on currency competition, institutional restrictions and exchange rates. When faced with currency competition, a country's government has two tools at its disposal: reduce the level of inflation or place institutional barriers to the use of foreign currency. In the first chapter, I propose a two-country, two-currency New Monetarist model to study currency competition. I model institutional barriers as a `tax' on the real value of foreign currency holdings which tends to lower a currency's value abroad than at home. This tax-induced asymmetric valuation of currencies leads to a set of rich and unique equilibrium currency ...
free text keywords: Economics, black market premium, capital controls, currency competition, currency substitution, dollarization, exchange rates
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