Please use this identifier to cite or link to this item: 
Year of Publication: 
Series/Report no.: 
Texto para discussão No. 416
Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia, Rio de Janeiro
The paper discusses the advantages and disadvantages of the full dollarization option and offers a few stylized facts and conclusions regarding the effects of full dollarization. On one hand, a full-dollarized economy delivers an impressive inflation performance and may even reduce the impact of external confidence shocks, although not external real shocks. On the other hand, full dollarization does not guarantee fiscal discipline neither the elimination of currency risk precludes default risk or the high volatility of sovereign spreads. In addition, it is not clear whether the reduction in domestic interest rates is the consequence of full dollarization or the competitive internationalized banking system.
Document Type: 
Working Paper

Files in This Item:
93.66 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.