02273cas a2200253 a 4500 AALejournalIMF018998 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484393192 1018-5941 BD-DhAAL BD-DhAAL Corrales, Juan. Financial Dollarization of Households and Firms : Does It Differ? / Juan Corrales, Patrick Imam. Washington, D.C. : International Monetary Fund, 2019. 1 online resource (45 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Using a newly complied and extended database from International Financial Statistics, and applying different panel-regression techniques, this paper documents the evolution of households' and firms' dollarization over the past decade. We assess the macroeconomic determinants of dollarization for households and firms and explore differences between high and low-income countries. We find that households' and firms' dollarization in loans and deposits are weakly explained by the currency substitution model, except in low income countries, where inflation plays a significant role. Instead, market development variables such as financial deepening, access to external debt and FX finance as well as other market considerations are key to explain the dynamics of deposits and loans dollarization, regardless of the level of income.These factors can account for a significant fraction of the dollarization, but using a variance decomposition model, there is evidence that a non-negligible portion has yet to be explained. This suggests that there are key determinants for household and firm dollarization that are not fully captured by traditional macroeconomic explanatory variables. Mode of access: Internet Imam, Patrick. IMF Working Papers; Working Paper ; No. 2019/019 Full text available on IMF http://elibrary.imf.org/view/journals/001/2019/019/001.2019.issue-019-en.xml IMF e-Library