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Ecuador: why exit dollarization?

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  • Paredes, Gonzalo J.

Abstract

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.

Suggested Citation

  • Paredes, Gonzalo J., 2017. "Ecuador: why exit dollarization?," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    • Handle: RePEc:ecr:col070:42014
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    References listed on IDEAS

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    1. Atish R Ghosh & Mahvash S Qureshi & Charalambos G Tsangarides, 2019. "Friedman Redux: External Adjustment and Exchange Rate Flexibility," The Economic Journal, Royal Economic Society, vol. 129(617), pages 408-438.
    2. Frenkel, Roberto, 2008. "The competitive real exchange-rate regime, inflation and monetary policy," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    3. Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
    4. Ana M. Martirena-Mantel, 2003. "Sobre la creación de áreas monetarias óptimas. El aporte de Robert Mundell," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(1-2), pages 97-115, January-D.
    5. Kenneth P. Jameson, 2003. "Is It Possible to De-Dollarize? : The Case of Ecuador," International Journal of Political Economy, Taylor & Francis Journals, vol. 33(1), pages 42-60.
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    Cited by:

    1. Marco Missaglia, 2021. "Understanding Dollarisation: A Keynesian/Kaleckian Perspective," Review of Political Economy, Taylor & Francis Journals, vol. 33(4), pages 656-686, October.

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