Simulating currency substitution bias
January 1989
Article
pp 269-272.
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The sign and size of estimates of the elasticity of currency substitution critically depend on the definition of the oppurtunity costs of holding money. We investigate possible biases by means of Monte Carlo experiments, as sufficient real data are not available.
Keywords
Automatically Extracted Terms
- currency
- interest
- experiment
- table
- substitution
- interest rates
- currency substitution
- money
- error
- interest rate regimes
- opportunity cost
- -0.19
- estimate
- table 3
- monte carlo experiments
- interest component
- currency ratio
- capital gains term
- statistic
- result
