Testimony on Dollarization
| dc.contributor.author | Calvo, Guillermo A. | |
| dc.date.accessioned | 2007-01-18T19:51:09Z | |
| dc.date.available | 2007-01-18T19:51:09Z | |
| dc.date.issued | 2000-06-22 | |
| dc.description | Presented Before the Subcommittee on Domestic and Monetary Policy Committee on Banking and Financial Services Washington, DC, June 22, 2000. | en |
| dc.description.abstract | I was invited here to explain about Dollarization, the benefits and costs for the US and the countries that adopt it. Before I start my formal presentation, I would like to state, in no uncertain terms, that I am a firm supporter of such system for many Emerging Market economies, EM, especially if it is done within the context of a Treaty with the US (as in Senator Connie Mack’s proposal). Moreover, I believe global dollarization will have direct economic benefits for the US, and enhance its role as a worldwide leader. Dollarization is the decision to abandon the national currency and replace it by the US Dollar (or some other hard currency like the Euro). This is a major economic and political decision. By default, a dollarized country adopts US monetary policy, even though the two countries could be going through different phases of the business cycle. Moreover, a dollarized country gives up the option of assisting banks by printing money in the case of a systemic bank run. In the first, and more substantive, part of my presentation I will argue that EM have already given up those functions. Therefore, dollarization is a win-win proposition except possibly for some fiscal costs (called seigniorage in the technical jargon). In the second part of the presentation I will evaluate the advantages of regional dollarization, and argue that dollarization is a winning proposition for the US. I will start the discussion by focusing on two key themes: Fear of Floating, and Lender of Last Resort. | en |
| dc.format.extent | 25100 bytes | |
| dc.format.mimetype | application/pdf | |
| dc.identifier.uri | http://hdl.handle.net/1903/4034 | |
| dc.language.iso | en_US | en |
| dc.relation.isAvailableAt | Digital Repository at the University of Maryland | en_us |
| dc.relation.isAvailableAt | Economics Department | en_us |
| dc.relation.isAvailableAt | College of Behavioral and Social Sciences | en_us |
| dc.relation.isAvailableAt | University of Maryland (College Park, Md.) | en_us |
| dc.subject | Fear of Floating | en |
| dc.subject | Lender of Last Resort | en |
| dc.subject | dollarization | en |
| dc.subject | emerging market economies | en |
| dc.subject | seigniorage | en |
| dc.title | Testimony on Dollarization | en |
| dc.type | Presentation | en |