Re: Dollarization

[Colin Danby <danbyc@xxxxxxx>]

Alan writes:

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

Several participants have questioned this notion of depoliticization.
As I suggested Dec 7
(http://csf.Colorado.EDU/forums/pkt/2000/msg02478.html)  a lot of
questionable assumptions about political economy and macroeconomic
structure are packed inside the neoliberal rhetoric about politicization
and credibility.

To regard Argentina's current quasi-currency-board as nonpolitical is to
ignore context; full dollarization would not in some way float above
existing context.

It's odd to run into this kind of argument on a PK list; perhaps Alan
does not really believe it.  Right now the IMF seems to be finishing
negotiations with Argentina for another $20 billion in lending to
provide liquidity for debt payments due next year; this requires
Argentina to generate even larger primary fiscal surpluses.
Officially-measured unemployment is now 15%.  This is not political?
Part of Keynes' argument over transfers was that they have very large
political aspects and consequences.

Best, Colin