The National Bank of Georgia publishes the next paper in its NBG Working Paper Series. The working papers aim to present research on topics relevant to central banks and economics profession. The papers are circulated to elicit comments and encourage debate on ongoing research. The Working Paper Series are coordinated by the Macroeconomic Research Division and focus on topics relevant for central bank policy, including macroeconomic modeling, monetary and exchange rate policies, financial stability, etc. 

The next working paper in the series titled "Negative Externalities of Financial Dollarization" was prepared by Valida Pantsulaia, Ana Jangveladze and Shalva Mkhatrishvili (all NBG). The paper discussed how several side effects of dollarization can result in dollarization persistence, even when the initial cause of it (price instability) is resolved. The authors argue that these dollarization-induced negative externalities could have economically significant costs (about 1 percentage point impact on real GDP growth per year) for a small and highly dollarized country like Georgia. 

The working papers can be accessed at the following page.