Loss of Seigniorage is not a Good Reason to not Dollarize
economicorder.substack.com
One of the most striking objections against dollarization is the loss of seigniorage, especially in Argentina. For some, the cost of sacrificing seigniorage to achieve lasting price stability seems too high to eliminate the 60% average yearly inflation Argentineans have suffered since the mid-1940s. Let’s delve into the trade-off between dollarization and seigniorage.
Loss of Seigniorage is not a Good Reason to not Dollarize
Loss of Seigniorage is not a Good Reason to…
Loss of Seigniorage is not a Good Reason to not Dollarize
One of the most striking objections against dollarization is the loss of seigniorage, especially in Argentina. For some, the cost of sacrificing seigniorage to achieve lasting price stability seems too high to eliminate the 60% average yearly inflation Argentineans have suffered since the mid-1940s. Let’s delve into the trade-off between dollarization and seigniorage.