The Ratchet Effect in the Dynamics of Deposit Structure: analysis for the CIS countries (press-release)

This research is aimed at modeling the dynamics of the currency structure of bank deposits taking into account the ratchet effect (hysteresis), as well as comparative scale of presence and comparative dynamics of this effect in the CIS economies, including Russia. This study contains a general model for the dynamics of the deposit currency structure that depends on changes in the interest rates and movements in exchange rates during 1998—2007. Such a basic model is than expanded taking into consideration the ratchet effect (asymmetrical impact of positive and negative shocks) on the deposits' structure. The study could be useful for developing a macroeconomic and monetary policy in transition economies. In particular, the obtained quantitative results could be used for forecasting potential changes in the de-posit structure in reaction to the actions of national authorities in Armenia, Kazakhstan and Russia.

The publication of the present paper was sponsored with the grant from the United States Agency for International Development (USAID).