Template-Type: ReDIF-Article 1.0

Author-Name: Jorge Eduardo Carrera
Author-Workplace-Name: CACES, UBA - UNLP 

Author-Name: Mariano Feliz
Author-Workplace-Name: CACES, UBA - PIETTE, CONICET- UNLP 

Author-Name: Demian Panigo
Author-Workplace-Name: CACES, UBA - PIETTE, CONICET- UNLP 

Title: How Does Dollarization Affect Real Volatility and Country Risk?

Abstract: This study gives a non-traditional framework for the evaluation of an asymmetric monetary association (such as dollarization). We discuss the relationship between real volatility and country risk and determine the necessary conditions for dollarization to improve social welfare. We concentrate in two main aspects: 1) the degree of synchronization between the cycle of the leader and associated country, and 2) the effect and relative importance of the trade and financial channels. The cyclical correlation is calculated from different methodologies and the effect and size of the channels are extracted from the impulse-response functions and variance descompositions of a VEC Model. We apply our analytical framework to Argentina. 

Classification-JEL: C5, F3

Journal: Económica
Pages: 73-136
Volume: XLVI
Issue: 2
Year: 2000
Month: July-December

File-URL: https://revistas.unlp.edu.ar/Economica/article/view/8530/7077
File-Format: Application/pdf
Handle: RePEc:akh:journl:514