Crisis And Dollarization In Ecuador
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Crisis And Dollarization In Ecuador
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Author : Paul Ely Beckerman
language : en
Publisher: World Bank Publications
Release Date : 2002
Crisis And Dollarization In Ecuador written by Paul Ely Beckerman and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with Business & Economics categories.
Early in 2000, Ecuador, in response to a serious economic and governance crisis, adopted the U.S. dollar as its national currency. This publication examines the economic conditions leading upto this action (including rising inflation, government intervention in the banking system and large fiscal deficits), describing the repeated cycles of crisis and failed stabilisation that fatally undermined confidence in the Ecuadoran sucre. It then goes on to analyse the initial results and its effects on inflation, growth, poverty, inequality, marginalisation and gender, as well as placing Ecuador's experience with dollarisation in an international perspective.
The Late 1990 S Financial Crisis In Ecuador
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Author : Luis Ignacio Jácome
language : en
Publisher: International Monetary Fund
Release Date : 2004
The Late 1990 S Financial Crisis In Ecuador written by Luis Ignacio Jácome and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Business & Economics categories.
This paper stresses three factors that amplified the 1990s financial crisis in Ecuador, namely institutional weaknesses, rigidities in public finances, and high financial dollarization. Institutional factors restricted the government's ability to respond in a timely manner and efficiently enough to prevent the escalation of the banking crisis and spurred the adoption of suboptimal policy decisions. Public finance rigidities limited the government's capacity to correct existing imbalances and the deteriorating fiscal stance associated with the costs of the financial crisis. Financial dollarization increasingly reduced the effectiveness of financial safety nets, fostered foreign currency demand, and accelerated a currency crisis, thereby further worsening the solvency of banks. These three factors reinforced each other, exacerbating costs as the economy went through a triple banking, currency, and fiscal crisis.
The Late 1990s Financial Crisis In Ecuador
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Author : Luis I. Jácome
language : en
Publisher:
Release Date : 2006
The Late 1990s Financial Crisis In Ecuador written by Luis I. Jácome and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
This paper stresses three factors that amplified the 1990s financial crisis in Ecuador, namely institutional weaknesses, rigidities in public finances, and high financial dollarization. Institutional factors restricted the government`s ability to respond in a timely manner and efficiently enough to prevent the escalation of the banking crisis and spurred the adoption of suboptimal policy decisions. Public finance rigidities limited the government`s capacity to correct existing imbalances and the deteriorating fiscal stance associated with the costs of the financial crisis. Financial dollarization increasingly reduced the effectiveness of financial safety nets, fostered foreign currency demand, and accelerated a currency crisis, thereby further worsening the solvency of banks. These three factors reinforced each other, exacerbating costs as the economy went through a triple banking, currency, and fiscal crisis.
Ecuador
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2006-03-10
Ecuador written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006-03-10 with Business & Economics categories.
This Selected Issues paper analyzes economic performance of Ecuador under dollarization. The paper reviews the principal trade-offs normally associated with official dollarization, and their specific relevance to Ecuador. It discusses Ecuador’s performance under the dollarization regime, highlighting the country’s main achievements and challenges in the macroeconomic and structural areas. The paper draws some conclusions and discusses what dollarization implies for Ecuador’s reform agenda in the future. The paper also assesses sustainability of Ecuador’s fiscal policy and explores criteria that could guide the setting of fiscal policy in the future.
Dollarization And Semi Dollarization In Ecuador
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Author : Paul Beckerman
language : en
Publisher:
Release Date : 2016
Dollarization And Semi Dollarization In Ecuador written by Paul Beckerman and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
In January 2000 Ecuador announced that it would dollarize fully, in response to an unprecedented crisis encompassing recession, widespread bank failures, and incipient hyperinflation. The crisis had intensified since early 1998, when a combination of external and climatic shocks set it off. The economy's partial dollarization made the crisis far worse than it would otherwise have been. The move to full dollarization is perhaps best understood as a structural reform to end an unstable dual-currency system.Over the 1980s and 1990s, GDP growth had stagnated on account of oil-export price volatility and natural disasters; the sacrifice of capital formation to heavy external public debt service; and incomplete, uneven structural reform. The exchange rate depreciation that proved continually necessary to sustain the net-export surplus and limit external debt accumulation induced Ecuadorians to dollarize spontaneously.The 1998 shocks affected real economic activity-hence bank loan portfolios, and widened the fiscal and current account deficits. The external imbalance led to exchange rate depreciation. Dollar-denominated bank loans whose borrowers lacked dollar income increasingly turned non-performing. At the same time, the depreciation swelled the local currency value of dollar deposit liabilities. Many depositors, fearing that banks had become unsafe, withdrew, and over 1999 the Central Bank had to provide banks massive liquidity support. By year's end the resulting monetary issue led to the exchange rate collapse and incipient hyperinflation that forced the move to full dollarization.Ecuador's Central Bank will continue operating, using its foreign exchange holdings to carry out limited liquidity management and lender-of-last-resort activities. Ecuador's public accounts and banking system remain vulnerable to commodity-price and natural shocks. Exchange rate adjustment and monetary expansion are no longer available, however, to manage the external accounts, accommodate the public deficit, or assist failing banks. Further structural reform remains essential to assure fiscal discipline and banking system safety.This paper - a product of the Economic Policy Sector Unit, Latin America and the Caribbean Region - is part of a larger effort in the region to understand the sources of macroeconomic instability and the implications of currency board arrangements and dollarization.
Crisis And Reform
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Author : Rachel Carrell
language : en
Publisher:
Release Date : 2004
Crisis And Reform written by Rachel Carrell and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Banks and banking categories.
The Late 1990s Financial Crisis In Ecuador
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Author : Luis Ignacio Jácome Hidalgo
language : en
Publisher:
Release Date : 2004
The Late 1990s Financial Crisis In Ecuador written by Luis Ignacio Jácome Hidalgo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with categories.
Argentine Convertibility
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Author : Alfredo Eric Calcagno
language : en
Publisher: Naciones Unidas, ECLAC
Release Date : 2001
Argentine Convertibility written by Alfredo Eric Calcagno and has been published by Naciones Unidas, ECLAC this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Business & Economics categories.
Latin America has had a great deal of experience with anti-inflationary policies based on different types of exchange-rate 'anchors'. However, the Argentine convertibility as well as dollarization in Ecuador go further in this direction, adopting a very strict monetary rule in the first case and giving up the emission of its own currency in the second. This publication identifies the effects that the convertibility system has had on the Argentine economy and on the functioning of the banking system. It also evaluates the extent to which the Argentine experience is relevant to the Ecuadorian dollarization process.
Mitigating The Poverty Effects Of Dollarization In Ecuador
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Author : Maria Lorena Correa
language : en
Publisher:
Release Date : 2000
Mitigating The Poverty Effects Of Dollarization In Ecuador written by Maria Lorena Correa and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with categories.
Dollarization And Trade Through The Lens Of History
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Author : Nicholas Gachet
language : en
Publisher:
Release Date : 2018
Dollarization And Trade Through The Lens Of History written by Nicholas Gachet and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
This paper makes a comparison between official dollarization and the classic gold standard by studying the effects of both on trade. Under this scheme, I have been able to assess the cases of Ecuador and El Salvador: two contemporary examples of official dollarization. In the case of Ecuador, it happened in 2000 after a financial crisis and for El Salvador it occurred when the country was under stable macroeconomic conditions in 2001. One of the benefits of the classic gold standard was its effects on trade, the same happening with official dollarization. Through a synthetic control analysis, I show the benefits of official dollarization in trade under the common currency framework. Results for Ecuador show that official dollarization has increase bilateral trade with the US by 43% over 14 years. Results for El Salvador show an increase of bilateral trade with the US of 76% over 13 years. What drives this difference? During the classic gold standard period (1870-1914) different monetary unions were formed having diverse effects on trade. One reason for this may be business cycle coordination among members while another could be structural reforms prior to adopting the system along with institutions, these lessons may be extrapolated to dollarization.