A Note on the Natural Rate of Dollarization: Mathematical Approximation of Limits

PINSHI, Christian P. (2022): A Note on the Natural Rate of Dollarization: Mathematical Approximation of Limits.

Abstract

This reflection attempts to explain the issue of dollarization in a different and innovative way with new recipes for ideas to understand how dollarization works and slow down its pace. Proceeding by a mathematical reflection of limits, we show that in a period of stability, when the rate of dollarization approaches very closely but is not equal to the total dollarization, all monetary policy interventions limit the rate of dollarization in order to that it does not achieve full dollarization. And when monetary policy interventions aim to de-dollarize the economy, the rate of dollarization becomes equilibrium or natural, so we obtain a natural rate of dollarization

• Item Type: MPRA Paper
• Language: English
• Keywords: Dollarization, Monetary policy
• Subjects: C - Mathematical and Quantitative Methods > C0 - General; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; F - International Economics > F3 - International Finance > F30 - General

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