Regional inflation, banking integration and dollarization

Martin Brown, Ralph de Haas, V. Sokolov

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We exploit variation in consumer price inflation across seventy-one Russian regions to examine the relationship between the perceived stability of the domestic 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 loans. The impact of inflation on credit dollarization is weaker in regions with less integrated banking markets. This suggests that the currency-portfolio choices of households and firms are constrained by the asset-liability management of banks.
Original languageEnglish
Pages (from-to)2073-2108
JournalReview of Finance
Volume22
Issue number6
DOIs
Publication statusPublished - Oct 2018

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

Cite this

Brown, Martin ; de Haas, Ralph ; Sokolov, V. / Regional inflation, banking integration and dollarization. In: Review of Finance. 2018 ; Vol. 22, No. 6. pp. 2073-2108.
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Regional inflation, banking integration and dollarization. / Brown, Martin; de Haas, Ralph; Sokolov, V.

In: Review of Finance, Vol. 22, No. 6, 10.2018, p. 2073-2108.

Research output: Contribution to journalArticleScientificpeer-review

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