The Twin Risks in the Dollarization Debate : Country and Devaluation Risks

  • Jaime Cardoso Pablo Druck Eduardo Morón
  • Published 2000

Abstract

The recent debate over dollarization has been more focused on the motives of the idea than in analyzing the proposal more formally. Here we attempt to prove a very simple point that should be considered as the hardest lesson ever learnt by emergent economies: no stability is achieved without fiscal sustainability. The purpose of devaluation has been usually… (More)

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