## Full Dollarization: The Pros and Cons

_Economic Issues, December 20, 2000_

## Source details

**Canonical URL:** [Full Dollarization: The Pros and Cons](https://www.imf.org/en/publications/economic-issues/issues/2016/12/30/full-dollarization-the-pros-and-cons-4003)

## Other formats

- [Markdown version](/en/publications/economic-issues/issues/2016/12/30/full-dollarization-the-pros-and-cons-4003/index.md)
- [Structured JSON version](/en/publications/economic-issues/issues/2016/12/30/full-dollarization-the-pros-and-cons-4003/index.json)
- [Bundle manifest](/en/publications/economic-issues/issues/2016/12/30/full-dollarization-the-pros-and-cons-4003/bundle-manifest.json)

## Bibliographic details
- Authors: Eduardo Borensztein, Andrew Berg
- Published: December 20, 2000
- Series: Economic Issues
- Volume: 2000
- Issue: 004
- Pages: 22
- DOI: https://doi.org/10.5089/9781557759931.051
- Stock No: EIIEA024
- ISBN: 9781557759931
- ISSN: 1020-5098

---

### Overview
- Authors: Eduardo Borensztein, Andrew Berg
- Publication date: December 20, 2000
- Core question: Costs and benefits of full dollarization (adoption by one country of another country’s currency)
- Main comparison: Full dollarization versus the currency board option

### Key findings: benefits
- Potential advantages include:
  - lower borrowing costs
  - deeper integration into world markets

### Key findings: costs and risks
- Potential disadvantages include:
  - loss of the ability to devalue
  - dependence on the U.S.

### Comparative analysis
- The analysis explicitly compares full dollarization with the currency board option, weighing trade-offs between:
  - relinquishing independent monetary policy (full dollarization) and
  - institutional arrangements that attempt to rigidly anchor a domestic currency (currency board)

### Subject coverage and keywords
- Subject: Banking, Currencies, Currency boards, Dollarization, Exchange rates, Financial crises, Foreign exchange, Monetary policy, Money
- Keywords: Currencies, currency, Currency boards, currency risk, devaluation, dollar, Dollarization, EI, exchange arrangement, Exchange rates, foreign currency, Global, money base, unit of account

---


_Source: https://www.imf.org/en/publications/economic-issues/issues/2016/12/30/full-dollarization-the-pros-and-cons-4003_