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Title: External financial intermediation and the composition of the money stock
Author: Booth di Giovanni, Heather
ISNI:       0000 0001 3470 5728
Awarding Body: University of Bristol
Current Institution: University of Bristol
Date of Award: 1991
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This thesis is intended as a contribution to the literature referred to as the "optimum currency area literature". The purpose of the analysis developed in the thesis is to gain an understanding of the monetary and financial implications of the actual currency area structure of the international economy. The analysis can then be used for the purpose of assessing whether changes in this currency area structure might be desirable. The theoretical material falls into three parts. Cross-country data are used in the theoretical chapters to assess the explanatory value of the ideas. The theoretical analysis is then applied to the historical experience of an individual country, Argentina. Time series data are offered for the application to the Argentine case. The first theoretical section of the thesis is concerned with the structure of the money supply in an economy as between its imported and domestic components. A central tenet of the thesis is that there are cross-country differences in the size of the imported share of the money supply which is required for monetary and exchange rate stability, and that these cross-country differences can be related to structural characteristics of an economy. It is shown that the structure of incremental money demand has important balance of payments implications. A theoretical framework for the analysis of the structure of the money supply is developed. This framework is then used to argue that an economy which makes more extensive use of external financial intermediation will require a larger share of foreign exchange reserves in the monetary base. The second part of the theoretical analysis studies some relationships between the currency area structure of the international economy and patterns of international financial intermediation. It is argued that we can identify certain structural features of a currency area which would give rise to a tendency for residents to make use offoreign financial centres. The theoretical considerations lead to an explanation, in terms of currency area structure, of certain crosscountry differences in financial development. In the third theoretical section, the analytical framework which was developed in previous chapters is used to address three specific questions. These questions serve to bring out some answers to the more general question of what are the implications for an economy of using an imported money supply. The analysis yields some new perspectives on the monetary and financial implications of import substitution industrialization policies, as well as on other problems and policy issues
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Banking