Cuba: from "Dollarization" to "Euro-ization" or "Peso Re-Consolidation"?
AbstractFollowing Cuba’s "de-penalization," of the use of the dollar in August 1993, its role expanded rapidly. It now may be a more significant component of the overall money supply than the old peso. This generates some advantages but also contributes to some problems. The Government of Cuba has considered the advisability of switching to the Euro, and more important, consolidating the role of the peso. A forced switch to the Euro would produce many more problems than it resolved. In the longer term, it would be unwise to adopt a currency that was economically and geo-economically inappropriate for Cuba, given the inevitability of a normalization of relations with the United States at some time in the future. The Central Bank of Cuba does not now appear to be pursuing the Euro-ization option. A more advantageous objective would be to restore the Cuban peso as a strong and convertible currency. This would involve unifying the bifurcated economic structure, the dual monetary system and the dual exchange rate system. This would be difficult to implement. It appears that while the Cuban government is studying the matter, it does not yet appear to be moving in this direction in a concerted way. In time, however, an appropriate mix of exchange rate, monetary, fiscal, and income or wage and salary policies should be able to support a rehabilitation of the Cuban peso. This essay explores possible processes for strengthening the role of the peso in Cuba’s monetary system.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Carleton University, Department of Economics in its series Carleton Economic Papers with number 00-13.
Length: 32 pages
Date of creation: 01 Oct 2000
Date of revision: 2003
Publication status: Published: Revised version in Latin American Politics and Society, Vol. 44, No. 2 (Summer 2002), pp. 99–123; reprinted as Cuba: ‘Dollarization’ and ‘De-Dollarization’, The Dollarization Debate, ed. Dominick Salvatore, James W. Dean, and Thomas D. Willett, Oxford University Press, 2003, Ch. 24 (pp. 425–448)
Contact details of provider:
Postal: 1125 Colonel By Drive, Ottawa Ontario, K1S 5B6 Canada
Find related papers by JEL classification:
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
- P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
- P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
This paper has been announced in the following NEP Reports:
- NEP-DEV-2000-11-14 (Development)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Archibald R. M. Ritter, 2004. "Cuba's Underground Economy," Carleton Economic Papers 04-12, Carleton University, Department of Economics, revised 14 Jan 2005.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Renee Lortie).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.