Ecuador: why exit dollarization?

Paredes, Gonzalo J.

2017-04

LC/PUB.2017/8-P
8

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Dollarization is a monetary regime that is detrimental to sustained growth and the ability to cope with successive external shocks. Setting out from this premise, the present paper sets forth five reasons why Ecuador would be well advised to end dollarization. Studies such as those of Naranjo and Naranjo (2011), Acosta (2004), Correa (2004a and 2004b), Naranjo (2004) and Jameson (2003) made valuable and distinctive contributions to this discussion, but the oil boom and the change in the mode of development over the past decade have tended to leave the debate increasingly void. This article makes reference to regulation theory and the Argentine crisis of 2001. It concludes that dollarization has been maintained because of a transformation in the mode of regulation that opened the way to a different accumulation regime, but that the country needs to restore its own currency if it is to consolidate the new mode of development.

ECONOMIC GROWTH; DOLAR; SISTEMAS MONETARIOS; POLITICA MONETARIA; CRECIMIENTO ECONOMICO; DOLLAR; MONETARY SYSTEMS; MONETARY POLICY;