Dollarization in Latin America The Cases of Argentina, Chile, Ecuador, Peru, and Uruguay

Open Access
Author:
Dewey, Robert Benjamin
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Saroj Bhattarai, Thesis Supervisor
  • James R. Tybout, Honors Advisor
Keywords:
  • Dollarization
  • Latin America
Abstract:
This paper analyzes the phenomenon of dollarization and de-dollarization that has taken place in the following Latin American countries from 2000-2011: Argentina, Chile, Ecuador, Peru, Uruguay, and determines if this phenomenon is correlated with any other levels of economic performance. The analysis gives a brief history of dollarization policies in each country, discusses the level of dollarization and policies to combat dollarization since 2000 in each of the countries, and examines the relationship between dollarization and inflation. After an overview of each of the countries, we highlight some common trends across all of the country cases and examine why this is the case. We then draw the conclusions that inflation and the level of dollarization are positively correlated, and that countries have the ability to take an active role in controlling or reducing the level of dollarization within their country.