Comment & Debate
“Basics of Dollarization”, Joint Economic Committee Staff Report July 1999, Updated January 2000 “In an influential study, Stanley Fischer, who today is the First Deputy Managing Director of the IMF, used data from the 1970s to estimate that the stock cost of official dollarization for an average country would have been 8 percent of gross national product (GNP, a concept closely related to the GDP more commonly used now [Fischer 1982, p. 305]). That is a large amount: for the United States today, it would exceed $700 billion. However, since the 1970s advances in technology have enabled deposit transfers to replace notes and coins for many types of payments. Because people use notes and coins less than formerly in most countries, the cost of replacing them, expressed as a percentage of GDP, is also less–generally 4 to 5 percent instead of 8 percent.”