Dollarization?(Dominican Republic)(Brief Article)

Caribbean Update, July, 2004

DOLLARIZATION? A statement made by US Undersecretary of Treasury for International Affairs John Taylor that the US would provide technical assistance to the Dominican government to dollarize the economy has brought the topic back to the forefront in the Dominican Republic, reports AP (May 21, 2004).

Taylor has debated that the high costs of discretionary monetary policy in developing countries tower above the real benefits and endorses the elimination of central banks in institutionally weak environments, which would be the case in the Dominican Republic. This was not the first time Taylor has spoken publicly on US government support of dollarization in the DR. In Oct. 2003, Taylor said that if the Dominican Republic wanted to dollarize, the US Treasury would...