Although the worldwide growth in dollarization of bank deposits has recently slowed, it has already reached very high …, particularly the response of dollarization to exchange rate changes, which is shown to be too small to warrant ‘fear of floating …’ by dollarized economies. But high dollarization is shown to increase the risk of depreciation and even suspension, as …

produce several departures from the conventional wisdom. We find that a pegged exchange rate or dollarization, while sometimes …

exclusion from debt markets. We compare a floating regime to full dollarization. We find that dollarization is potentially … maintain access to debt markets. Given stronger repayment incentives, more borrowing can be supported, and thus dollarization …