IDEAS home Printed from https://ideas.repec.org/p/avg/wpaper/en11316.html

Twenty years of official dollarization in Ecuador: a blessing or a curse?

Author

Listed:
  • Selin ÖZYURT
  • Simon CUEVA (TNK Economics)

Abstract

Ecuador adopted the U.S. dollar as its legal tender in January 2000, in a context of deep economic and political crisis. Almost two decades later in December 2019, the Executive Board of the International Monetary Fund (IMF) approved a total disbursement of US$498 million after the completion of the second and third reviews under the Extended Fund Facility Arrangement. The financial agreement with the IMF had been concluded in March 2019, under the presidency of Lenin Moreno, in order to address the country’s growing external financing needs. Within the framework of the macroeconomic program supported by the IMF, Ecuadorian authorities committed to ensure fiscal sustainability, re-build the international reserves of the Central Bank of Ecuador (BCE), and strengthen the institutional foundations of official dollarization.

Suggested Citation

  • Selin ÖZYURT & Simon CUEVA (TNK Economics), 2020. "Twenty years of official dollarization in Ecuador: a blessing or a curse?," Working Paper 19795ea3-88a3-4f85-af90-a, Agence française de développement.
    • Handle: RePEc:avg:wpaper:en11316
    as

    Download full text from publisher

    File URL: https://www.afd.fr/sites/afd/files/2020-09-04-23-15/official-dollarization-ecuador.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. International Monetary Fund, 2019. "Honduras: Staff Report for the 2019 Article IV Consultation and Request for a Stand-By Arrangement and an Arrangement Under the Standby Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Honduras," IMF Staff Country Reports 2019/236, International Monetary Fund.
    2. Paul Beckerman & Andres Solimano, 2002. "Crisis and Dollarization in Ecuador : Stability, Growth, and Social Equity," World Bank Publications - Books, The World Bank Group, number 14256, April.
    3. 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.
    4. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2007. "Finance, inequality and the poor," Journal of Economic Growth, Springer, vol. 12(1), pages 27-49, March.
    5. Mr. Luis Ignacio Jácome, 2004. "The Late 1990's Financial Crisis in Ecuador: Institutional Weaknesses, Fiscal Rigidities, and Financial Dollarization At Work," IMF Working Papers 2004/012, International Monetary Fund.
    6. Kose, M. Ayhan, 2002. "Explaining business cycles in small open economies: 'How much do world prices matter?'," Journal of International Economics, Elsevier, vol. 56(2), pages 299-327, March.
    7. Rose, Andrew K & Engel, Charles, 2002. "Currency Unions and International Integration," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(4), pages 1067-1089, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rapetti, Martin & Palazzo, Gabriel & Waldman, Joaquin, 2023. "Planes de estabilización: Evidencia de América Latina [Stabilization plans: Evidence from Latin America]," MPRA Paper 118910, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cachanosky, Nicolás & Salter, Alexander W. & Savanti, Ignacio, 2022. "Can dollarization constrain a populist leader? The case of Rafael Correa in Ecuador," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 430-442.
    2. Mar𨁌orena Mar𑁥l Cristo & Marta G -Puig, 2013. "Pass-through in dollarized countries: should Ecuador abandon the US dollar?," Applied Economics, Taylor & Francis Journals, vol. 45(31), pages 4395-4411, November.
    3. Cruz-Rodríguez, Alexis, 2005. "¿Es la dolarización oficial una opción real para las economías emergentes? [Is Official Dollarization a real option for emerging countries?]," MPRA Paper 54353, University Library of Munich, Germany.
    4. María Fernanda Guevara-Segarra & María Gabriela Guevara-Segarra & Ana Paula Quinde-Pineda & Luis Fernando Guerrero-Vásquez, 2025. "Capital Formation and Oil Consumption Drive CO 2 Emissions in Ecuador: Evidence from an ARDL Model in Log-First Differences," Sustainability, MDPI, vol. 17(17), pages 1-20, August.
    5. Gutiérrez-Romero, Roxana & Ahamed, Mostak, 2021. "COVID-19 response needs to broaden financial inclusion to curb the rise in poverty," World Development, Elsevier, vol. 138(C).
    6. López-Cálix, José R. & Melo, Alberto & Tinsley, Elaine & Calvo, Sara, 2005. "Creating Fiscal Space for Poverty Reduction in Ecuador: A Fiscal Management and Public Expenditure Review," IDB Publications (Books), Inter-American Development Bank, number 371.
    7. Ms. Giorgia Albertin, 2008. "Trade Effects of Currency Unions: Do Economic Dissimilarities Matter?," IMF Working Papers 2008/249, International Monetary Fund.
    8. Marc Flandreau & Mathilde Maurel, 2005. "Monetary Union, Trade Integration, and Business Cycles in 19th Century Europe," Open Economies Review, Springer, vol. 16(2), pages 135-152, April.
    9. Oliver Denk & Boris Cournède, 2015. "Finance and income inequality in OECD countries," OECD Economics Department Working Papers 1224, OECD Publishing.
    10. Rishika Khetan & Varda Sardana & Shubham Singhania & Jagvinder Singh, 2025. "Financial stability through a global perspective: an in-depth integrative review," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 16(8), pages 2912-2929, August.
    11. Ferda Halicioglu, 2005. "Active And Passive Seigniorage Revenues: The Case For Turkey 1970-1997," Macroeconomics 0503010, University Library of Munich, Germany.
    12. Deniz Sevinc & Edgar Mata Flores & Simon Collinson, 2020. "Are there inequality spillovers? Evidence through a modified inequality measure and European dynamics of inequality," Working Papers 545, ECINEQ, Society for the Study of Economic Inequality.
    13. Cong Minh Huynh & Nam Hoai Tran, 2023. "Financial development, income inequality, and institutional quality: A multi-dimensional analysis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2242128-224, June.
    14. Wang, Wei & Yang, Haoxi & Wang, Xi, 2023. "Financial development and wage income: Evidence from the global football market," Journal of Banking & Finance, Elsevier, vol. 149(C).
    15. Aggarwal, Reena & Demirgüç-Kunt, Asli & Pería, Maria Soledad Martínez, 2011. "Do remittances promote financial development?," Journal of Development Economics, Elsevier, vol. 96(2), pages 255-264, November.
    16. Camilo Alberto Cárdenas-Hurtado & Aaron Levi Garavito-Acosta & Jorge Hernán Toro-Córdoba, 2018. "Asymmetric Effects of Terms of Trade Shocks on Tradable and Non-tradable Investment Rates: The Colombian Case," Borradores de Economia 1043, Banco de la Republica de Colombia.
    17. Hyojung Kang & Kshitiz Shrestha & Jorge Martinez-Vazquez, 2026. "When Does Fiscal Decentralization Lead to Inclusive Growth?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper2611, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    18. Donatella, Baiardi & Claudio, Morana, 2015. "Financial deepening and income distribution inequality in the euro area," Working Papers 316, University of Milano-Bicocca, Department of Economics, revised 04 Dec 2015.
    19. James B. Ang & Jakob B. Madsen, 2012. "Risk capital, private credit, and innovative production," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1608-1639, November.
    20. Andrew K. Rose & T. D. Stanley, 2005. "A Meta‐Analysis of the Effect of Common Currencies on International Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 347-365, July.

    More about this item

    Keywords

    ;

    JEL classification:

    • E - Macroeconomics and Monetary Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:avg:wpaper:en11316. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AFD (email available below). General contact details of provider: https://edirc.repec.org/data/afdgvfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.