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The paper reviews recent theoretical and empirical developments in the analysis of informal currency markets in developing countries. The basic characteristics of these markets are highlighted, and alternative analytical models to explain them are discussed. The implications for exchange rate policy —including imposition of foreign exchange restrictions, devaluation, and unification of exchange markets— in countries with a sizable parallel market are also examined.
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The paper reviews recent theoretical and empirical developments in the analysis of informal currency markets in developing countries. The basic characteristics
The paper develops and tests a model of a developing economy that incorporates trade and capital restrictions, illegal transactions, a parallel foreign exchange
The paper reviews recent theoretical and empirical developments in the analysis of informal currency markets in developing countries. The basic characteristics
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