TY  - JOUR
AU  - Edwards,Sebastian
AU  - Magendzo,I. Igal
TI  - Dollarization, Inflation and Growth
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8671
PY  - 2001
Y2  - December 2001
UR  - http://www.nber.org/papers/w8671
L1  - http://www.nber.org/papers/w8671.pdf
N1  - Author contact info:
Sebastian Edwards
UCLA Anderson Graduate School of Business
110 Westwood Plaza, Suite C508
Box 951481
Los Angeles, CA 90095-1481
Tel: 310/206-6797
Fax: 310/206-5825
E-Mail: sebastian.edwards@anderson.ucla.edu
AB  - In this paper we analyze the macroeconomic record of dollarized economies. In particular, we investigating whether, as its supporters' claim, dollarization is associated with lower inflation and faster growth. We analyze this issue by using a matching estimator technique developed in the training evaluation literature. Our findings suggest that inflation has been significantly lower in dollarized nations than in non-dollarized ones. We also find that dollarized nations have had a lower rate of economic growth than non-dollarized ones. Finally, we find that macroeconomic volatility is not significantly different across dollarized and non-dollarized economies. We conjecture that the lower rate of economic growth in dollarized countries is due, at least in part, to these countries' difficulties in accommodating external disturbances, such as major term of trade and capital flows shocks.
ER  -