A very commonly observed phenomenon in developing and emerging market economies is the use of another country’s currency (US dollar or other) in lieu or in addition to the local currency. Governments in these countries have been encouraging dollariz

One of the main reasons for dollarization is the erosion of money's function as a store of value as the Currency Substitution view suggests. It has not been uncommon for countries with high inflationary processes to have high dollarization ratios and banking system that faces important...