Abstract
This paper looks at twenty first-century dollarization in Latin America. We emphasize that dollarization is a complex reform that can be implemented in many different ways. We draw three important lessons from these experiences: (1) keeping the central bank after dollarizing is an unnecessary institutional vulnerability that facilitates compulsive de-dollarization, (2) public opinion offers the most important defense of dollarization against populist attempts at reversal, and (3) even if dollarization is not supported with structural reforms (or such reforms are reversed), it remains superior to the counterfactual of no reforms with persistent, high and volatile inflation.
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Articles in the same Issue
- Frontmatter
- Editorial
- The Economists’ Voice, June Issue 2023, Editorial
- Policy Papers
- Davids and Goliaths: Hidden Champions in an Age of Industrial Policy
- Can You Have Your Corporate Wokeism and Eat it too?
- Lessons from Latin America Dollarization in the Twenty First Century
- Measuring Communication Quality of Interest Rate Announcements
- The Political Economy of Transatlantic Security – A Policy Perspective
- Policy Forum: Monetary Policy and the Threat of Fiscal Dominance
- Apolitical Money – An Illusion?
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- Debt Sustainability in the Emerging New EU Fiscal Framework: A Major Change
- Government Bond Spreads in the Euro Area
- Selective Bond Purchases – May the ECB Chose Winners and Losers?
- Britain’s Failed Attempt at Monetary and Fiscal Exceptionalism
- Government Debt and Monetary Policy Perspectives in Japan
- Long-Term Strategies to Reduce Public Debt from a Historical Perspective
Articles in the same Issue
- Frontmatter
- Editorial
- The Economists’ Voice, June Issue 2023, Editorial
- Policy Papers
- Davids and Goliaths: Hidden Champions in an Age of Industrial Policy
- Can You Have Your Corporate Wokeism and Eat it too?
- Lessons from Latin America Dollarization in the Twenty First Century
- Measuring Communication Quality of Interest Rate Announcements
- The Political Economy of Transatlantic Security – A Policy Perspective
- Policy Forum: Monetary Policy and the Threat of Fiscal Dominance
- Apolitical Money – An Illusion?
- The ECB’s Transmission Protection Instrument and Fiscal Stability
- Debt Sustainability in the Emerging New EU Fiscal Framework: A Major Change
- Government Bond Spreads in the Euro Area
- Selective Bond Purchases – May the ECB Chose Winners and Losers?
- Britain’s Failed Attempt at Monetary and Fiscal Exceptionalism
- Government Debt and Monetary Policy Perspectives in Japan
- Long-Term Strategies to Reduce Public Debt from a Historical Perspective