this post was submitted on 14 Dec 2023
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Economics
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It's basically the gold standard. The country not having the ability to devalue is exactly the point.
The monetary trilemma is that you have to choose 2: monetary independence, exchange rate stability, and free capital flow. Dollarizing picks exchange rate stability over monetary independence. There are downsides but it's a legitimate choice, there are upsides too.
The gold standard is a very bad idea though. It's incredibly valuable for a country to have it's own currency that can adjust to meet the situation.