DETERMINANTS OF DEPOSIT AND CREDIT EUROIZATION IN EASTERN EUROPE: A BAYESIAN MODEL AVERAGING EVIDENCE

• Authors: Kukučková Soňa , Vaněk Petr , Koráb Petr
• Languages of publication: EN

Abstracts

EN

The paper investigates the motives for deposit and credit euroization in Eastern Europe employing Bayesian empirical methodology. We analyse an extensive dataset of macroeconomic fundamentals, perception surveys and institutional quality indicators, and deal with the uncertainty in the model by Bayesian model averaging. Apart from traditional fundamental macroeconomic factors, strong institutions are found to be an important driver of both credit and deposit euroization. Business regulation, perception of corruption, quality of political arrangement and trade restrictions impact borrowing and saving behaviour in the euro and should be reflected in designing economic policies in the region.

Keywords

EN

EUROIZATION; BAYESIAN MODEL AVERAGING; CURRENCY; FOREIGN CURRENCY; EASTERN EUROPE

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2019
• Volume: 67
• Issue: 5
• Pages: 550 – 566

Contributors

author

Kukučková Soňa

• Mendel University in Brno, Faculty of Business and Economics, Department of Finance, Zemědělská 1, 613 00 Brno, Czech Republic

author

Vaněk Petr

author

Koráb Petr