The Costs of Losing Monetary Independence: The Case of Mexico

This paper develops a two-country monetary model calibrated to data from the United States and Mexico to address the question of whether dollarization is welfare improving for the two countries. Our findings suggest that dollarization is not necessarily Pareto superior to monetary independence for M...

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Veröffentlicht in:	Journal of money, credit and banking credit and banking, 2001-05, Vol.33 (2), p.370-397
Hauptverfasser:	Cooley, Thomas F., Quadrini, Vincenzo
Format:	Artikel
Sprache:	eng
Schlagworte:	American dollar Bank loans Consumption Costs Currencies Currency Dollar Dollar (United States) Dollarization Economic aspects Economic models Economic policy Equilibrium Households Independence Inflation Inflation rates Interest rates International economic relations Mexico Monetary policy Monetary systems Monetary theory Nominal interest rates Pesos Studies Taxes U.S.A
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Zusammenfassung:	This paper develops a two-country monetary model calibrated to data from the United States and Mexico to address the question of whether dollarization is welfare improving for the two countries. Our findings suggest that dollarization is not necessarily Pareto superior to monetary independence for Mexico.
ISSN:	0022-2879 1538-4616
DOI:	10.2307/2673906