MONETARY POLICY DILEMMA IN AN ECONOMY WITH PARTIAL DOLARIZATION / DILEMA DE POLÍTICA MONETÁRIA NUMA ECONOMIA PARCIALMENTE DOLARIZADA

AUTOR(ES)

CHRISTIANO ARRIGONI COELHO

DATA DE PUBLICAÇÃO

2003

RESUMO

This study analyses if there is monetary policy dilemma in an economy with partial dolarization. Dolarization occurs when foreign money has the three classical functions of money: mean of trade, store of value and unity of account. We will study an economy with partial dolarization, i.e., only part of economy uses the foreign money on transactions. The main result is that there will be monetary policy dilemma even when the stickiness of prices is the same across the sectors of economy. This conclusion goes on the opposite direction of the literature that studies the welfare effects of monetary policy in economies with asymmetric sectors. We conclude that the result is caused by the change of economy s structure that occurs when the economy has partial dolarization. The intuition is that monetary authority has only one instrument for achieving different objectives that will not be reached because of economy s structure.

ASSUNTO(S)

dilema de politica monetaria dolarizacao dolarization monetary policy dilemma asymmetric sectors assimetria setorial

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