Re: dollarization (was: imposing)

["Colin Danby" <danbyc@xxxxxxx>]

> So are you saying dollarization is a good idea?

It would be lunacy to step in between Henry and Alan, but let me meekly
suggest that this may not be the most useful question to debate.
Dollarization has to be seen as part of a set of other policies in a
specific place and time and not on its own -- this is a bit like asking
whether fixed exchange rates are preferable to flexible, in the abstract.
You have to presuppose a fictitious typical economy to answer.

Warren is on to something more useful -- it really does come down to
employment policy, as Douglas Vickers taught me in grad school.  Argentina's
c-board is part of an unemployment policy, a macro project that is almost
the polar opposite of a Warren plan.

Panama is a US colony with an unusual banking system.  El Salvador has a
very specific U.S. relationship given among other things that maybe a third
of its labor force works in the US.  Ecuador and Argentina have vastly
different economies.  There is not a lot we can usefully understand by
generalizing across them, however provocative the superficial kinship of
their currency arrangements.

(And I fail to see how *anything* can be generalized from Hong Kong's
experience, then or now.)

I share Henry's distatste for colonial institutions but I am happy to
concede to Alan that one can imagine circumstances and contexts in which
almost any conceivable currency arrangement might make sense.  For example
if like Panama you have a big money-laundry business...

There is no reason for PKers to follow the bad habits of mainstream
economists in assuming that there is one true national economic structure
for which appropriate policies can be figured out through abstract thought.

Best, Colin