Which brings us to recent commentary that Venezuela could
copy Ecuador, and dollarize. If so,
great. By all accounts the value of the
Venezuelan bolivar has declined substantially, so the adoption of the dollar
would be a signal that Venezuelan officials are at least somewhat connected to
reality. That’s the case because it’s already likely true that the bolivar has
disappeared as a unit of account in Venezuela.
The latter is a statement of the obvious. Who would want to transact in
something that is defined by rapidly declining value? Better yet, who would
want to be paid in such a currency? More…
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