Introduction to Central Banking, Monetary Policy and the Political Economy of Dollarization

Sylvio Kappes and Andrés Arauz

A chapter in Central Banking, Monetary Policy and the Political Economy of Dollarization, 2025, pp 1-4 from Edward Elgar Publishing

Abstract: Dollarization was far from being a hot topic when we began to organize this book. It was obviously a very important issue for those countries living under this regime, but it was no longer a common recipe for stabilization as it was in the 1980s and 1990s. Months before the book went to print, several events brought dollarization back to the spotlight. The most iconic was the election of Javier Milei in Argentina, whose main policy proposal was to dollarize the economy. In Costa Rica, the congress is debating a bill that proposes the substitution of the Colón by the US Dollar. In the opposite direction, Zimbabwe introduced a new gold-backed currency, the ZiG, in an effort to curb dollarization. The continuing and increasingly regulated cryptocurrency sphere is almost completely dollarized, with dollar stablecoins as the most traded cryptocurrencies. In this book, scholars from many countries deal with the issue of dollarization from both local and global perspectives. A related issue, euroization, is also explored. With case studies from Ecuador, El Salvador, Panama, Argentina, Nigeria, Ghana, Vietnam, Montenegro, and Kosovo, the authors show that the promises of dollarization – stability with growth – are far from their respective realities.

Keywords: Dollarization; Central banking; Monetary policy; Political economy; Latin America; Macroeconomics (search for similar items in EconPapers)
Date: 2025
ISBN: 9781803925325
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