Dollarisation and overshooting in the Congo during the 1990s, an empirical estimate Online publication date: Wed, 13-Jan-2010
by E.m.K. Mambu
International Journal of Economic Policy in Emerging Economies (IJEPEE), Vol. 2, No. 4, 2009
Abstract: During the 1990s, whenever inflation accelerated in the Congo (Dem. Rep.) the domestic currency was abandoned in favour of dollar holdings. The increased demand for dollars resulted in a higher relative price of the latter or greater depreciation of domestic currency, which is the essence of exchange rate overshooting. In demand terms, there was a greater preference for foreign currencies than for goods. Unlike the Dornbusch model, the 1990s exchange rate overshooting associated with dollarisation in Congo assumes no price rigidity. It suggests, instead, that both prices and the exchange rate did adjust speedily to changes in the money supply.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economic Policy in Emerging Economies (IJEPEE):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com