Dollarization and economic interdependence: The case of Ecuador
Abstract: Economic theory suggests that dollarization increases the degree of interdependence between the dollarized economy and the anchor country. We test this theory for the case of the U.S. and Ecuador. We perform cointegration and common cycles tests for data at the aggregate and industry levels. The results show that the economies of the U.S. and Ecuador were interrelated prior to dollarization. The interrelation increased after Ecuador adopted the U.S. dollar. This finding holds true for various Ecuadorian industries. Synchronization for the case of the financial industry is particularly revealing, as it shows how dollarization leads to the integration of financial markets.
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ILADES. Universidad Alberto Hurtado.
2021
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oai:scielo:S0718-887020210001000852021-05-05Dollarization and economic interdependence: The case of EcuadorCastillo-Ponce,Ramon A.Truong,BrianRodriguez-Espinosa,Maria de Lourdes Dollarization Business Cycles Synchronization Economic Integration Financial Integration Abstract: Economic theory suggests that dollarization increases the degree of interdependence between the dollarized economy and the anchor country. We test this theory for the case of the U.S. and Ecuador. We perform cointegration and common cycles tests for data at the aggregate and industry levels. The results show that the economies of the U.S. and Ecuador were interrelated prior to dollarization. The interrelation increased after Ecuador adopted the U.S. dollar. This finding holds true for various Ecuadorian industries. Synchronization for the case of the financial industry is particularly revealing, as it shows how dollarization leads to the integration of financial markets.info:eu-repo/semantics/openAccessILADES. Universidad Alberto Hurtado.Revista de análisis económico v.36 n.1 20212021-04-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-88702021000100085en10.4067/S0718-88702021000100085 |
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Castillo-Ponce,Ramon A. Truong,Brian Rodriguez-Espinosa,Maria de Lourdes |
| spellingShingle |
Castillo-Ponce,Ramon A. Truong,Brian Rodriguez-Espinosa,Maria de Lourdes Dollarization and economic interdependence: The case of Ecuador |
| author_facet |
Castillo-Ponce,Ramon A. Truong,Brian Rodriguez-Espinosa,Maria de Lourdes |
| author_sort |
Castillo-Ponce,Ramon A. |
| title |
Dollarization and economic interdependence: The case of Ecuador |
| title_short |
Dollarization and economic interdependence: The case of Ecuador |
| title_full |
Dollarization and economic interdependence: The case of Ecuador |
| title_fullStr |
Dollarization and economic interdependence: The case of Ecuador |
| title_full_unstemmed |
Dollarization and economic interdependence: The case of Ecuador |
| title_sort |
dollarization and economic interdependence: the case of ecuador |
| description |
Abstract: Economic theory suggests that dollarization increases the degree of interdependence between the dollarized economy and the anchor country. We test this theory for the case of the U.S. and Ecuador. We perform cointegration and common cycles tests for data at the aggregate and industry levels. The results show that the economies of the U.S. and Ecuador were interrelated prior to dollarization. The interrelation increased after Ecuador adopted the U.S. dollar. This finding holds true for various Ecuadorian industries. Synchronization for the case of the financial industry is particularly revealing, as it shows how dollarization leads to the integration of financial markets. |
| publisher |
ILADES. Universidad Alberto Hurtado. |
| publishDate |
2021 |
| url |
http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-88702021000100085 |
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