Regional Spillovers in Financial Dollarization

Kyriakos Neanidis, Christos S. Savva

Research output: Working paper

Abstract

This paper examines the presence of cross-country or regional spillovers in financial dollarization. Using spatial econometric techniques and a unique monthly dataset of deposit and loan dollarization extending over two decades for 23 transition countries that belong in the same geographical region, we find strong evidence of regional spillovers in both types of dollarization. Spillovers are channelled by trade and banking linkages, and pass through to all countries independently of their level of financial dollarization. Policy interventions that reduce dollarization in one country can, therefore, affect neighboring countries.
Original languageEnglish
Publication statusPublished - 2018

Publication series

NameCentre for Growth and Business Cycle Research Discussion Paper Series

Keywords

  • Financial dollarization; Spillovers; Trade and banking linkages; Transition economies; Spatial econometrics

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