Re: Dollarisation

["Alan G. Isaac" <aisaac@xxxxxxxxxxxx>]

On Wed, 6 Dec 2000, Henry C.K. Liu wrote:
> Dollarization is pure monetary abdication by sovereign governments, pure and
> simple.

Absolutely right: monetary sovereignty is sacrificed
to a pragmatic desire for better macroeconomic
outcomes.

> Dollarization will work better if the dollarized economies have representation
> and veto power on the Federal Reserve Board.

The whole idea of dollarization, of course,
is to *de*politicize monetary policy in the
dollarizing economy.

Alan Isaac

PS Just to be clear, I am not advocating dollarization
for any specific economy.  I do suspect Argentina would
be better off with dollarization than with its current
(or past!) arrangements, but I claim no relevant expertise.