Regional Inflation and Financial Dollarization

M. Brown, R. de Haas, V. Sokolov

Research output: Working paperDiscussion paperOther research output

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Abstract

Abstract: We exploit variation in consumer price inflation across 71 Russian regions to examine the relationship between the perceived stability of the local currency and financial dollarization. Our results show that regions with higher inflation experience an increase in the dollarization of household deposits and a decrease in the dollarization of (long-term) household credit. The negative impact of inflation on credit dollarization is weaker in regions with less-integrated banking markets, suggesting that the asset-liability management of banks constrains the currency-portfolio choices of households.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages26
Volume2013-073
Publication statusPublished - 2013

Publication series

NameCentER Discussion Paper
Volume2013-073

Fingerprint

Inflation
Dollarization
Household
Currency
Credit
Deposits
Asset-liability management
Integrated
Banking
High inflation
Portfolio choice
Consumer prices

Keywords

  • Financial dollarization
  • financial integration
  • regional inflation

Cite this

Brown, M., de Haas, R., & Sokolov, V. (2013). Regional Inflation and Financial Dollarization. (CentER Discussion Paper; Vol. 2013-073). Tilburg: Finance.
Brown, M. ; de Haas, R. ; Sokolov, V. / Regional Inflation and Financial Dollarization. Tilburg : Finance, 2013. (CentER Discussion Paper).
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Brown, M, de Haas, R & Sokolov, V 2013 'Regional Inflation and Financial Dollarization' CentER Discussion Paper, vol. 2013-073, Finance, Tilburg.

Regional Inflation and Financial Dollarization. / Brown, M.; de Haas, R.; Sokolov, V.

Tilburg : Finance, 2013. (CentER Discussion Paper; Vol. 2013-073).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Regional Inflation and Financial Dollarization

AU - Brown, M.

AU - de Haas, R.

AU - Sokolov, V.

N1 - Pagination: 26

PY - 2013

Y1 - 2013

N2 - Abstract: We exploit variation in consumer price inflation across 71 Russian regions to examine the relationship between the perceived stability of the local currency and financial dollarization. Our results show that regions with higher inflation experience an increase in the dollarization of household deposits and a decrease in the dollarization of (long-term) household credit. The negative impact of inflation on credit dollarization is weaker in regions with less-integrated banking markets, suggesting that the asset-liability management of banks constrains the currency-portfolio choices of households.

AB - Abstract: We exploit variation in consumer price inflation across 71 Russian regions to examine the relationship between the perceived stability of the local currency and financial dollarization. Our results show that regions with higher inflation experience an increase in the dollarization of household deposits and a decrease in the dollarization of (long-term) household credit. The negative impact of inflation on credit dollarization is weaker in regions with less-integrated banking markets, suggesting that the asset-liability management of banks constrains the currency-portfolio choices of households.

KW - Financial dollarization

KW - financial integration

KW - regional inflation

M3 - Discussion paper

VL - 2013-073

T3 - CentER Discussion Paper

BT - Regional Inflation and Financial Dollarization

PB - Finance

CY - Tilburg

ER -

Brown M, de Haas R, Sokolov V. Regional Inflation and Financial Dollarization. Tilburg: Finance. 2013. (CentER Discussion Paper).