Descripción

In this paper we analyze the macroeconomic record of dollarized economies. In  particular, we investigate 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.