On Dollarization

11 Pages Posted: 6 May 2003

See all articles by Guillermo A. Calvo

Guillermo A. Calvo

Columbia University - School of International & Public Affairs (SIPA); National Bureau of Economic Research (NBER)


The paper examines the case for dollarization in emerging market economies. It is claimed that dollarization becomes an attractive monetary regime when account is taken of recent financial turmoil in such economies. The case is further strengthened by the fact that these economies have a penchant for acquiring dollar debts (i.e., liability dollarization). However, exchange rate misalignment and deflation are potentially serious problems, unless appropriate fiscal and public sector prices policies are implemented, in addition to establishing a financial sector whose assets and liabilities face parallel relative price risks.

JEL Classification: F31, F41

Suggested Citation

Calvo, Guillermo A., On Dollarization. Available at SSRN: https://ssrn.com/abstract=317345

Guillermo A. Calvo (Contact Author)

Columbia University - School of International & Public Affairs (SIPA) ( email )

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New York, NY 10027
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National Bureau of Economic Research (NBER) ( email )

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