Can dollarization constrain a populist leader? The case of Rafael Correa in Ecuador

Nicolas Cachanosky, Alexander W. Salter and Ignacio Savanti

Journal of Economic Behavior & Organization, 2022, vol. 200, issue C, 430-442

Abstract: Rafael Correa's presidency in Ecuador (2007 – 2017) exemplifies left-leaning populist regimes in Latin America. However, there is a key difference: Ecuador is a dollarized economy. This removes the possibility of fiscal dominance over monetary policy as is common in populist regimes. This paper studies how dollarization constraints a populist leader. We discuss the incentives of a budget constraint immune to monetization and the failed attempt to launch a national digital currency.

Keywords: Ecuador; Dollarization; Populism (search for similar items in EconPapers)
JEL-codes: E50 P50 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:200:y:2022:i:c:p:430-442

DOI: 10.1016/j.jebo.2022.06.006

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