Structure of Monetary Assets in Transition Economies: Financial Innovation and Structural Transformation

Gérard Duchêne (1, 2) , Ramona Jimborean (1) , Boris Najman (2, 3)

1 ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique
2 CES - Centre d'économie de la Sorbonne
3 GRATICE - EA3488 Groupe de recherche et d'analyse des théories, institutions et conventions économiques

Using a panel data set we investigate the specificities of the structure of monetary assets in transition economies. This analysis reveals the main factors standing behind the structure of deposits held with banks (demand or time deposits), as well as the determinants of the trade-off between cash and demand deposits in Central and Eastern European Countries and in Former Soviet Union countries. We show that the strong preference for cash, which appears in transition countries, is related to the extent of the informal sector, to the low efficiency of the banking sector as well as to the massive currency substitutions. The relatively high share of time deposits compared to demand deposits is due to the inefficiency of the banking system and to the low level of development of alternative financial markets.

Mots clés: transition economics; money demand; cash deposit ratio

Domaines: Economies et finances

Gérard Duchêne, Ramona Jimborean, Boris Najman. Structure of Monetary Assets in Transition Economies: Financial Innovation and Structural Transformation. Développements récents en Economie Financière, aspects microéconomiques et macroéconomiques., May 2006, Strasbourg, France. ⟨hal-00270544⟩