Topic
Currency
About: Currency is a research topic. Over the lifetime, 26697 publications have been published within this topic receiving 485370 citations. The topic is also known as: monetary unit & unit of money.
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TL;DR: The European Central Bank of the European Union as discussed by the authors proposed to issue large-denomination notes of 100, 200, and 500 to discourage underground use of currency, even at the expense of losing out on foreign demand.
Abstract: Public finance solutions to the European unemployment problem?
Developing countries may hold as much as 25-30% of the $1.3 trillion OECD currency supply. Although dollar holdings appear to exceed DM holdings by a factor of four, the advent of the euro may change this balance. Indeed, by issuing large-denomination notes of 100, 200 and 500, the European Central Bank appears to be well poised to challenge the dominance of the ubiquitous US $100 note. However, large-denomination notes are also extremely popular in the OECD underground economy, which appears to hold at least 50% of the currency supply. As a result, the seigniorage revenues obtained by issuing large-denomination notes may be an accounting illusion, substantially or fully offset by losses due to increased tax evasion. Hence, the new European Central Bank may wish to consider policies that discourage underground use of currency, even at the expense of losing out on foreign demand.
— Kenneth Rogoff
195 citations
TL;DR: In this paper, a general functional form is considered for which the linear and logarithmic functional forms are special cases for money stock defined as currency plus demand deposits, and the empirical evidence suggests that the log-factor functional model is appropriate for time deposits.
Abstract: A general functional form is considered for which the linear and logarithmic functional forms are special cases. The general functional form is a power transformation of each of the variables—each variable is raised to a λ power. This functional form is estimated for the demand for money using the maximum likelihood method. Real money demand is specified to be a function of real current income and a short-term interest rate. The empirical evidence suggests that the logarithmic functional form is appropriate for money stock defined as currency plus demand deposits. For money stock defined to also include time deposits, neither the linear nor logarithmic form seems appropriate. The estimates of λ are insensitive to expansion of the model explaining money demand, but functional form is important for discrimination among alternative hypotheses.
195 citations
TL;DR: In this article, the authors studied firm-level investment in the wake of the Mexican peso crisis of 1994 and found that exporters outperform nonexporters in terms of profits and sales after the devaluation, their investment is constrained by weak balance sheets.
195 citations
TL;DR: The authors used a newly available set of data on foreign exchange expectations to directly test the rationality of four foreign currency markets and found that the results reject the rational expectations hypothesis. But the results were not conclusive.
193 citations
TL;DR: In this paper, the authors developed an empirical model of bilateral exchange rate volatility and explored the determinants of BER volatility in a broad cross-section of countries, concluding that external debt tightens financial constraints and reduces the efficiency of the exchange rate in responding to external shocks.
193 citations