Article ID Journal Published Year Pages File Type
964127 Journal of International Money and Finance 2011 15 Pages PDF
Abstract
► We model the effect of large real depreciations on investment in dollarized economies. ► In the presence of dollarized liabilities, a nonlinear investment function results. ► Large depreciations have negative impact on investment through balance-sheet effects. ► We show empirical evidence of such nonlinearity in a large panel of countries.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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The relationship between investment and large exchange rate depreciations in dollarized economies
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