On Dollarization
On Dollarization
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Date
1999-04-20
Authors
Calvo, Guillermo A.
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Abstract
Recent worldwide turmoil in financial markets is triggering a major revision of the
conventional wisdom about Emerging Market countries’ (EMs) macroeconomic management.
As a result, the debate is wide open as to the set of policies and institutional arrangements that
would ensure EMs’ macroeconomic stability. Opinions range from those favoring further
pursuing market-friendly reforms to controls on capital mobility and even trade, and from
dollarization to floating exchange rates. The debate on the appropriate exchange rate system, in
particular, has taken center-stage.