Dollarization can be a double-edged sword. It can provide monetary stability, but in times of crisis, it can also significantly constrain the central bank from lending a helping hand when it’s necessary. Professors Douglas Gales and Xavier Vives provide an ex-ante approach to establish the viability of dollarization for any given economy.
Content: Article
Authors: Douglas Gale, Xavier Vives
Source: INSEAD Knowledge
Subjects: Economics, Finance
Authors: Douglas Gale, Xavier Vives
Source: INSEAD Knowledge
Subjects: Economics, Finance
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old title: Dollarization, Bailouts, and the Stability of the Banking System
for more from Lawrence Lessig visit:
http://www.darwinmag.com/read/080102/lessig.html