Caravello, Tomás E.; Martinez-Bruera, Pedro; Werning, Iván - National Bureau of Economic Research - 2023
We study the effects of an anticipated dollarization, announced today but planned to be implemented at some future date …, in a simple open-economy model. Motivated by the profile of countries considering dollarization we make the following …, without dollarization monetary policy finances a deficit via seignorage. We focus on the pre-dollarization period. Our results …