ECON 330D1 Chapter 13: The Open Economy Under a Fixed Exchange Rate Regime
9 Feb 2017
School
Department
Course
Professor
Document Summary
Chapter 13: the open economy under a fixed exchange rate regime. As of march 31st, all sections are excluded except 13. 14- dollarization (mycourses). Dollarization: dollarization means the adoption of the us dollar as its main domestic currency, without a distinct national currency in existence at the same time. For monetary purposes, the country adopting dollarization is somewhat an extension of the us economy. This promotes trade with the us, promoting capital and tech flows, but does not attain perfect flows of capital or tech that occur within the us. An increase in monetary base represents a net increase in government revenues equal to the amount of the increase. The retirement of a national currency in favour of the. Us$ means that the seigniorage inherent in the existing monetary base and its future increases is lost by the domestic country while the usa gets this seigniorage.
