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Dollarization: Debates and Policy Alternatives

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Table of content:
1. Dollarization: A premier
2. Dollarization: Analytical issues
3. Using balance sheet data to identify sovereign default and devaluation risk
4. Dollarization and the lender of last resort
5. Measuring costs and benefits of dollarization: An application of Central Americana and Caribbean countries
6. Dollarization: The link between devaluation and default risk
7. Implementation guidelines for dollarization and monetary unions
8. The political economy of dollarization: Domestic and international factors

Most of these old papers (from the academic time line) can be downloaded from Internet for free by searching from google.com, for example. These days Economics books by MIT Press tend to collect old papers and keep the table of content secret. What a good strategy.

As opposed to most of the literature on the topic (de jure/formal/full dollarization Salvadorean style; NOT de facto financial dollarization that characterizes many developing countries), this volume succeeds in presenting a balanced compendium of papers that summarizes the main issues, informing the reader without trying to sell a particular option. The Primer is particularly helpful for dollarization curious policy makers and economist without an emerging market orientation. While briefing on the contents of the different chapters of the volume, it tackles a number of diverse and related topics, ranging from old-style optimum currency area criteria to modern-style developing-coutries-cannot-manage-their-own-currency type of arguments (the so called monetary credibility argument), to non-economical political considerations, always avoiding easy simplifications of generalizations. For that reason, it may read as a little derivative sometimes, but a second reading and a long reference list provides a fairly comprehensive unbiased introduction that is difficult to find elsewhere. For those whose want more, the chapters elaborate on particular themes discussed in the introductory primer. The language is as diverse as the authors of the papers, going from an analytical presentation of the credibility-flexibility tradeoff by Chang and Velasco to a down-to-earth step by step guide for a prospective dollarizer by Gruber and co-authors, to a descriptive account of the political aspects by Frieden. All in all, a nice introduction for the lay and an up to date reference book for the initiated. (True, papers can be downloaded, some even in the final version, from the Internet. But this happens to be the rule rather than the exception in these days. At least, MIT Press has done an unexpectedly creative job with the cover.)

As opposed to most of the literature on the topic (de jure/formal/full dollarization Salvadorean style; NOT de facto financial dollarization that characterizes many developing countries), this volume succeeds in presenting a balanced compendium of papers that summarizes the main issues, informing the reader without trying to sell a particular option. The Primer is particularly helpful for dollarization curious policy makers and economist without an emerging market orientation. While briefing on the contents of the different chapters of the volume, it tackles a number of diverse and related topics, ranging from old-style optimum currency area criteria to modern-style developing-coutries-cannot-manage-their-own-currency type of arguments (the so called monetary credibility argument), to non-economical political considerations, always avoiding easy simplifications of generalizations. For that reason, it may read as a little derivative sometimes, but a second reading and a long reference list provides a fairly comprehensive unbiased introduction that is difficult to find elsewhere. For those whose want more, the chapters elaborate on particular themes discussed in the introductory primer. The language is as diverse as the authors of the papers, going from an analytical presentation of the credibility-flexibility tradeoff by Chang and Velasco to a down-to-earth step by step guide for a prospective dollarizer by Gruber and co-authors, to a descriptive account of the political aspects by Frieden. All in all, a nice introduction for the lay and an up to date reference book for the initiated. (True, papers can be downloaded, some even in the final version, from the Internet. But this happens to be the rule rather than the exception in these days. At least, MIT Press has done an unexpectedly creative job with the cover.)