At 11:03 AM 5/3/01 -0400, you wrote:
Colin
Believe it or not, I am serious. But I am also ignorant, and open to
persuasion and even dissuasion.
Think of a branch bank. Under dollarization we no longer have to ensure
that each branch has no deficit or surplus, and depress the local economy
if it should run a deficit.
But Basil there is a difference between a branch bank of a single bank not
having to worry about a balance of payments between itself and the mother
bank AND two separate banks at the same clearing house. In the latter
case, one bank can get into deficit problems at the clearing house while
the other runs a surplus -- even though both banks keep their accounting
records in the same unit of account, say the dollar.
You are apparently envisioning a single commercial bank spanning the globe
-- which is a lot more than mere dollarization.
Paul
Paul Davidson
Editor, JOURNAL OF POST KEYNESIAN ECONOMICS
Holly Chair of Excellence in Political Economy
Economics Department - University of Tennessee
523 SMC
Knoxville, Tennessee 37996-0550
work phone: (865) 974-4221
fax: (865) 974-4601/ (865) 974-1686
home fax: (865) 577-7748