Chancen und Risiken einer Dollarisierung in Argentinien

The collapse of the Argentinean Currency Board revived the debate about the optimal exchange rate regime for Argentina. Given its large exposure to nervous international investors, Argentina is a strong candidate for dollarization, which could provide lower inflation and higher financial integration with the United States. However, Argentina’s poor qualifications for a fixed exchange rate under the traditional optimum currency area criteria and the absence of adequate labor market and fiscal policy structures indicate that dollarization would suffer from the same problems as the Currency Board system. Thus, dollarization, in advance of other fundamental reforms seems a risky strategy.