Dollarization / edited by Eduardo Levy Yeyati and Federico Sturzenegger.

Format:

Book

Contributor:

Levy Yeyati, Eduardo.

Sturzenegger, Federico.

Language:

English

Subjects (All):

Money.

Dollar, American.

Foreign exchange.

Currency question.

International finance.

Physical Description:

ix, 341 pages : illustrations ; 24 cm

Place of Publication:

Cambridge, Mass. : MIT Press, [2003]

Summary:

With the persistent instability of international financial markets, emerging economies are exploring new ways to reduce exposure to capital flow volatility. Some analysts argue that financially open economies are best served by more flexible regimes, while others argue in favor of extreme exchange rate regimes that have a strong commitment to a fixed parity or dispense with an independent currency. The successful launch of the euro has made more realistic the prospect of replacing a national currency with a strong foreign one. Recent examples include the adoption of the U.S. dollar by Ecuador and El Salvador. The introduction of a foreign currency as sole legal tender, termed full (de jure) dollarization, has been the center of much political and academic debate. This book provides a comprehensive analysis of the issues from both theoretical and empirical perspectives. The topics discussed include the role of balance sheet effects, the linkage between currency risk and country risk, the impact of dollarization on trade, financial integration and credibility, the implications of dollarization for the lender of last resort, and the institutional and political economy aspects of dollarization.

Contents:

1 Dollarization: A Primer / Eduardo Levy Yeyati, Federico Sturzenegger 1

2 Dollarization: Analytical Issues / Roberto Chang, Andres Velasco 53

3 Using Balance Sheet Data to Identify Sovereign Default and Devaluation Risk / Pablo Andres Neumeyer, Juan Pablo Nicolini 77

4 Dollarization and the Lender of Last Resort / Christian Broda, Eduardo Levy Yeyati 101

5 Measuring Costs and Benefits of Dollarization: An Application to Central American and Caribbean Countries / Ugo Panizza, Ernesto Stein, Ernesto Talvi 133

6 Dollarization: The Link between Devaluation and Default Risk / Andrew Powell, Federico Sturzenegger 201

7 Implementation Guidelines for Dollarization and Monetary Unions / William C. Gruben, Mark A. Wynne, Carlos E. J. M. Zarazaga 237

8 The Political Economy of Dollarization: Domestic and International Factors / Jeffry A. Frieden 305.

Notes:

Subtitle on jacket: debates and policy alternatives.

Includes bibliographical references and index.

ISBN:

0262122502 :

OCLC:

49649539