Working Paper: Lessons from Dollarization in Latin America in the 21st Century
Son muchas las lecciones que se pueden aprender estudiando casos reales de dolarización. En este paper con Alex Salter, junto a Emilio Ocampo repasamos algunas de las más importantes.
Abstract
This paper looks at 21st-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.