Exchange-Rate Unification with Black Market Leakages: Russia 1992

44 Pages Posted: 15 Feb 2006

See all articles by Linda S. Goldberg

Linda S. Goldberg

Federal Reserve Bank of New York; National Bureau of Economic Research (NBER)

Date Written: February 1993

Abstract

In 1992 Russia unified the multiple exchange rates that had applied to international transactions. This paper describes the multiple exchange rate system that existed in Russia prior to mid-1992 and undertakes a theoretical exploration of the effects of the exchange rate unification that took place in July 1992. The model developed here allows for leakages between official and black markets and permits flexibility of the exchange rates in both official and parallel currency markets. Within this multiple exchange rate system with black market leakages, we trace the dynamic effects on official and parallel foreign exchange markets of changes in the types of policy instruments associated with Russia`s exchange rate regime reform. These instruments include adjustments of pegged interbank market exchange rates, rates of foreign exchange surrender taxation, and rates of taxation of capital account transactions.

JEL Classification: F3, F4, N2, P5

Suggested Citation

Goldberg, Linda S., Exchange-Rate Unification with Black Market Leakages: Russia 1992 (February 1993). IMF Working Paper, Vol. , pp. 1-44, 1993. Available at SSRN: https://ssrn.com/abstract=883434

Linda S. Goldberg (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-2836 (Phone)
212-720-6831 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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