Naslov
Croatian Kuna: Money, or just a Currency? Evidence from the Interbank Market

Autori
Mance, Davor ; Olgić Draženović, Bojana ; SuljiĆ Nikolaj, Stella

Izvornik
UTMS Journal of economics (1857-6974) 10 (2019), 2; 149-161

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
money functions, euroization, ZIBOR, Granger causality

Sažetak
Modern sovereign money is accepted as an institution in virtue of the collective intentionality of the acceptance of the sovereign status function declaration it being the official currency of a country. A status function declaration may not create money it may only create a currency. How does one test the fact that an official currency also has all the properties of money? We propose a rather simple test based on the Granger causality of the acceptance of a currency in virtue of money if, and only if, the allocation function of its market interest rate is not rejected. This condition is fulfilled if the interest rate is its genuine allocator. This is the case if the changes in quantity cause the change in the interest rate as a price of money i.e. its true opportunity cost. We find that market interest rate changes are Granger caused by changes in quantities of traded euros on the overnight banking market but not by changes in the quantity of traded Croatian kuna. Thus, the Croatian kuna is only the domestic currency of Croatia, and the euro is its true money.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA