Domestic Price Dollarization in Emerging Economies

A previous version of this paper circulated under the title “Pricing in Multiple Currencies in Domestic Markets.” We thank Ariel Burstein, Giancarlo Corsetti, Javier Cravino, Oleg Itskhoki, Matteo Maggiori, Dmitry Mukhin, Brent Neiman, and seminar participants at Columbia University, the 2017 SED Meetings, NBER Summer Institute (IFM and EFMB), Minnesota Workshop in Macroeconomic Theory, NYU, Chicago Booth International Macro-Finance Conference, the 2018 AEA Meetings, and Harvard University for valuable comments, and the Economics Department at Universidad de la Republica (Uruguay) for sharing the data. We also thank Luigi Caloi, Rafael Guntin, Gustavo Pereira, and Emilio Zaratiegui for excellent research assistance. Financial support from ISERP (Columbia University) is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.