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YES 2011 DUBROVNIK,JUNE 28,2011

YES 2011 DUBROVNIK,JUNE 28,2011. M.TKALEC “Determinants of Deposit Euroization” COMMENT by Oleh Havrylyshyn. MAIN CONTRIBUTIONS OF PAPER. IDENTIFY EXISTENCE OF THRESHOLD EFFECTS OF CHANGES IN EX. RATE AND INT.RATE DIFF ,ON DE

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YES 2011 DUBROVNIK,JUNE 28,2011

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  1. YES 2011DUBROVNIK,JUNE 28,2011 M.TKALEC “Determinants of Deposit Euroization” COMMENT by Oleh Havrylyshyn

  2. MAIN CONTRIBUTIONS OF PAPER • IDENTIFY EXISTENCE OF THRESHOLD EFFECTS OF CHANGES IN EX. RATE AND INT.RATE DIFF ,ON DE • FIND SOME EVIDENCE THAT EX. REGIME MATTERS, FLEXIBLE HAVE LESS DE • USE LATEST AVAILABLE DATA ALLOWING OBSERVATION OF THESE EFFECTS IN PERIODS OF BOOM , RECESSION, RECOVERY

  3. MAIN CONCERNS THAT NEED ATTENTION • INSUFFICIENT ATTENTION TO DE vs. CE (unclear comparison with literature; policy implications differ for the two ) • WHY ONLY ER AND IRD ? SAMPLE SEEMS LARGE ENOUGH TO LOOK AT OTHER FACTORS • Presentational: READER WORKS HARD TO “SEE” RESULTS IN HUGE NUMBER OF TABLES AND GRAPHS! Should provide a summary table in Sec.5 by regime, nature of effects .

  4. KEEP CLEAR DE vsCE IN COMPARING WITH EARLIER LITERATURE • FOCUS OF PAPER ON DE ONLY IS OK BUT MUST RECOGNISE THIS IN COMPARISONS • e.g.: p.11 :“results confirm Luca/ Petrova, Rosenberg/Tirpak” --- BUT p.3 makes clear these studies are on CE not DE.—be careful and clear

  5. DE vs. CE MATTERS FOR POLICY RECOMMENDATIONS • LIT. CONSENSUS: CE IS THE BIG RISK (though high DE can lead to high CE),; indeed paper recognizes this bottom p.1. • ALSO CONSENSUS THAT MONETARY POLICY BETTER ADDRESSED TO CE (see Galac/Kraft paper for DEC XVII) • THEREFORE TKALEC PAPER ON DE , CAN PROVIDE BACKGROUND INFO. FOR CENTRAL BANKERS ON GENERAL MACRO STANCE , NOT DIRECT INSTRUMENTS a la TINBERGEN

  6. WHY ONLY ER AND IRD? • P. 8 INDICATES 185 OBSERVATIONS: WHY IS THIS TOO LITTLE TO INCLUDE SOME OF THE OTHER FACTORS LISTED IN LIT.REVIEW? • AS AN e.g.: Size may explain contrary result for Poland, Fin.depth that of CZ

  7. OTHER FACTORS MATTER FOR POLICY • TKALEC RECOGNIZES (last sentence p.12) that policy for de-Euroization should take account of country characteristics. • THIS IS ABSOLUTELY RIGHT, AND A GOOD SELF-RECOMMENDATION FOR ELABORATION OF THE ANALYSIS, THIS OR NEW PAPER

  8. VALUTIZACIJA? • DOLLARIZATION , EUROIZATION, INCOMPLETE, AWKWARD , AND SOMETIMES MISLEADING TERMS • ENGLISH LANGUAGE IS A CONSTRAINT HERE , BUT ….. • CROATIAN ( INDEED SLAVIC IN GENERAL) DOES HAVE A GOOD WORD:VALUTA=FOREIGN CURRENCY; VALUTIZACIJA = INCREASE OF FCRATIO

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