Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264751 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 159
Publisher: 
Oesterreichische Nationalbank (OeNB), Vienna
Abstract: 
We present new evidence on de facto euroization in eleven Central, Eastern and Southeastern European countries. Estimates of the extent of foreign currency cash holdings are derived from survey data. Furthermore, we define overall euroization indices, relating both assets and cash holdings. Results confirm that some countries are heavily euroized and that euro cash holdings constitute a sizeable share of local currency in circulation. Euroization levels in other –mainly Central European– countries are low and economically insignificant. Evidently, high euroization bears various significant consequences for economic policies. Therefore, we inquire on the determinants of euroization. We find that euroization is highly correlated with the quality of past economic governance, reflecting past periods of instabilities. In contrast, the more recent –pre-financial crisis– course of economic history had only limited impact. Thus, our results are in line with the view that policy makers in highly euroized countries are severely constrained by past events and that euroization levels might be difficult to revert through stable macroeconomic policies.
Subjects: 
Dollarization
Euroization
Currency Substitution
Survey Data
Central
Eastern
Southeastern
Europe
CEE
SEE
JEL: 
E41
E50
D14
Document Type: 
Working Paper

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