Regional inflation, banking integration and dollarization
Brown,Martin de Haas,Ralph Sokolov,V.
Brown,Martin
de Haas,Ralph
Sokolov,V.
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.
Description
Date
2018-10
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
Organizational Units
Journal Issue
Keywords
E31 - Price Level ; Inflation ; Deflation, G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages, F36 - Financial Aspects of Economic Integration, E44 - Financial Markets and the Macroeconomy, P24 - National Income, Product, and Expenditure ; Money ; Inflation, P22 - Prices, SDG 3 - Good Health and Well-being
Citation
Brown, M, de Haas, R & Sokolov, V 2018, 'Regional inflation, banking integration and dollarization', Review of Finance, vol. 22, no. 6, pp. 2073-2108. https://doi.org/10.1093/rof/rfx021