Welfare Effects of Uzbekistan's Foreign Exchange Regime

24 Pages Posted: 10 Feb 2006

See all articles by Christoph B. Rosenberg

Christoph B. Rosenberg

International Monetary Fund (IMF) - European Department

Maarten de Zeeuw

International Monetary Fund (IMF) - European Department

Date Written: March 2000

Abstract

In addition to transferring about 16 percent of GDP from exporters to importers, Uzbekistan's quasi-fiscal multiple exchange rate regime generates identifiable welfare losses of 2-8 percent of GDP on import markets and up to 15 percent on export markets. These excess burdens have increased substantially with the growing difference of exchange rates. The welfare analysis allows some conclusions regarding the optimal reform strategy, (i) welfare losses will decline overproportionally as exchange rates unify; (ii) exchange rate unification should be supplemented by changing the explicit fiscal system; (iii) at a minimum, Uzbekistan would benefit from moving to an explicit fiscal regime.

Keywords: Multiple Exchange Rates, Welfare Analysis, Quasi-Fiscal Operations, Uzbekistan

JEL Classification: F31, H29

Suggested Citation

Rosenberg, Christoph and de Zeeuw, Maarten, Welfare Effects of Uzbekistan's Foreign Exchange Regime (March 2000). Available at SSRN: https://ssrn.com/abstract=879543 or http://dx.doi.org/10.2139/ssrn.879543

Christoph Rosenberg (Contact Author)

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Maarten De Zeeuw

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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