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An incentive-compatible suggestion for seigniorage sharing with dollarizing countries

  • Owen F. Humpage

Sixteen countries now treat the U.S. dollar as legal tender. Although dollarizing can help emerging-market countries gain monetary credibility and avoid currency crises, many do not want to give up the seigniorage revenues associated with issuing their own fiat currency. This article offers a proposal for seigniorage sharing.

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Article provided by Federal Reserve Bank of Cleveland in its journal Policy Discussion Papers.

Volume (Year): (2002)
Issue (Month): Jun ()

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Handle: RePEc:fip:fedcpd:y:2002:i:jun:n:4
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  1. Dale Bails and Margie A. Tieslau, 2000. "The Impact of Fiscal Constitutions on State and Local Expenditures," Cato Journal, Cato Journal, Cato Institute, vol. 20(2), Fall.
  2. repec:cto:journl:v:20:y:2000:i:2:p:179-213 is not listed on IDEAS
  3. Pablo Emilio Guidotti & Carlos A. Rodriguez, 1991. "Dollarization in Latin America: Gresham's Law in Reverse?," IMF Working Papers 91/117, International Monetary Fund.
  4. Calvo, Guillermo A, 2001. "Capital Markets and the Exchange Rate with Special Reference to the Dollarization Debate in Latin America," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 312-34, May.
  5. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-25, July.
  6. Eduardo Borensztein & Andrew Berg, 2000. "The Pros and Cons of Full Dollarization," IMF Working Papers 00/50, International Monetary Fund.
  7. Zeljko Bogetic, 2005. "Official Dollarization: Current Experiences and Issues, Cato Journal, Vol. 20, No. 2 (Fall 2000), 179-213," International Finance 0510006, EconWPA.
  8. Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear of Floating," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 379-408.
  9. Russell W. Cooper & Hubert Kempf, 2001. "Dollarization and the conquest of hyperinflation in divided societies," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sum, pages 3-12.
  10. Fischer, Stanley, 1982. "Seigniorage and the Case for a National Money," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 295-313, April.
  11. Adam Bennett & Eduardo Borensztein & Tomás J. T. Baliño, 1999. "Monetary Policy in Dollarized Economies," IMF Occasional Papers 171, International Monetary Fund.
  12. Clements, Benedict & Schwartz, Gerd, 1993. "Currency substitution: The recent experience of Bolivia," World Development, Elsevier, vol. 21(11), pages 1883-1893, November.
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