Reassessing the feasibility of adopting dollarization in Latin America

León Padilla
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引用次数: 2

Abstract

PurposeThis paper analyses the possibility of Latin America's (LA) major economies adopting dollarization, considering that in the last decade macroeconomic instability has once again challenged the ability of certain economies to properly manage their own currency.Design/methodology/approachTo determine the feasibility of adopting the US dollar as official currency, the author uses the framework of optimum currency area (OCA) theory, since, in fact, dollarization is an incomplete monetary union. The author uses a structural vector autoregressive (SVAR) model to identify what type of structural shock — country-specific, regional or global — prevails in LA economies. For this purpose, the US output is used to represent the global output and determine how the shocks of the US influence the output trajectory of each LA nation. The higher the influence of the US product, the lower the costs of adopting the US dollar.FindingsThe results of the variance decomposition show that the influence of the US shocks in the gross domestic product (GDP) trajectory of LA countries has significantly decreased over the last two decades, even in the currently dollarized economies. The estimates for Venezuela and Argentina show that the importance of US shocks in the trajectory of their GDP is low. Therefore, the cost of adopting the US dollar as the official currency would be high.Originality/valueIn view of hyperinflation and macroeconomic imbalances in certain LA nations, the dollarization debate has resurfaced in recent years. However, the literature that empirically evaluates the feasibility of adopting dollarization as a monetary system under current economic conditions is limited.
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重新评估拉丁美洲实行美元化的可行性
本文分析了拉丁美洲(LA)主要经济体采用美元化的可能性,考虑到在过去十年中宏观经济的不稳定再次挑战了某些经济体妥善管理本国货币的能力。为了确定采用美元作为官方货币的可行性,作者使用了最优货币区(OCA)理论的框架,因为事实上,美元化是一个不完全的货币联盟。作者使用结构向量自回归(SVAR)模型来确定哪些类型的结构性冲击-具体国家,区域或全球-普遍存在于洛杉矶经济体。为此,我们使用美国产出来代表全球产出,并确定美国的冲击如何影响每个洛杉矶国家的产出轨迹。美国产品的影响力越高,采用美元的成本越低。方差分解的结果表明,美国冲击对洛杉矶国家国内生产总值(GDP)轨迹的影响在过去二十年中显著下降,即使在目前美元化的经济体中也是如此。对委内瑞拉和阿根廷的估计表明,美国冲击对两国GDP轨迹的重要性很低。因此,采用美元作为官方货币的成本将很高。从某些洛杉矶国家的恶性通货膨胀和宏观经济失衡的角度来看,美元化的争论近年来重新浮出水面。然而,实证评估在当前经济条件下采用美元化作为货币体系可行性的文献有限。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
Journal of Economics, Finance and Administrative Science
Journal of Economics, Finance and Administrative Science Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)
CiteScore
5.10
自引率
20.80%
发文量
23
审稿时长
12 weeks
期刊介绍: The Universidad ESAN, with more than 50 years of experience in the higher education field and post graduate studies, desires to contribute to the academic community with the most outstanding pieces of research. We gratefully welcome suggestions and contributions from business areas such as operations, supply chain, economics, finance and administration. We publish twice a year, six articles for each issue.
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