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A Note on the Natural Rate of Dollarization: Mathematical Approximation of Limits

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  • PINSHI, Christian P.

Abstract

This reflection attempts to explain the issue of dollarization in a different and innovative way with new recipes for ideas to understand how dollarization works and slow down its pace. Proceeding by a mathematical reflection of limits, we show that in a period of stability, when the rate of dollarization approaches very closely but is not equal to the total dollarization, all monetary policy interventions limit the rate of dollarization in order to that it does not achieve full dollarization. And when monetary policy interventions aim to de-dollarize the economy, the rate of dollarization becomes equilibrium or natural, so we obtain a natural rate of dollarization

Suggested Citation

  • PINSHI, Christian P., 2022. "A Note on the Natural Rate of Dollarization: Mathematical Approximation of Limits," MPRA Paper 111671, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:111671
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    File URL: https://mpra.ub.uni-muenchen.de/111671/1/MPRA_paper_111671.pdf
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    References listed on IDEAS

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    1. PINSHI, Christian P., 2019. "Dollarization and Foreign Exchange Reserve : Debate on the Effectiveness of Monetary Policy in DR. Congo," MPRA Paper 104807, University Library of Munich, Germany.
    2. Pinshi, Christian P., 2020. "Monetary policy, uncertainty and COVID-19," MPRA Paper 100836, University Library of Munich, Germany, revised 27 May 2020.
    3. Christian Pinshi, 2020. "COVID-19 uncertainty and monetary policy," Working Papers hal-02566796, HAL.
    4. PINSHI, Christian P., 2020. "Uncertainty, monetary policy and COVID-19," MPRA Paper 100147, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Dollarization; Monetary policy;

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F30 - International Economics - - International Finance - - - General

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