Following 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 Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper 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:
01 Mar 2002 Publication status: Published: Carleton Working Paper Handle: RePEc:car:carecp:00-13
Contact details of provider: Postal: 1125 Colonel By Drive, Ottawa Ontario, K1S 5B6 Canada Phone: 1-613-520-3744 Fax: 1-613-520-3906
Order Information: Email:
For technical questions regarding this item, or to correct its listing, contact: (Deirdre Nelson).
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 Linkages
This paper has been announced in the following NEP Reports: