Cowan, Kevin; Do, Quy-Toan - 2003
altering the effect of a devaluation on output, has a disciplining effect when the Central Bank's objectives differ from the … social optimum. However, under imperfect information, bad priors about the Central Bank induce excess dollarization of … liabilities, which in turn limits the ability of the Central Bank to conduct an optimal monetary policy. In addition the economy …