Argument: Maintaining a national currency can be very costly to citizens

Issue Report: Dollarization


  • Daniel Gross. “The Case for Fewer but Stronger Currencies”. The New York Times. February 19, 2006 – “nations can impose enormous costs on their citizens when they take extraordinary efforts to maintain independent currencies. ‘Devaluations of currencies cost people their savings and bring on rapid inflation,’ said Benn Steil, a senior fellow at the Council on Foreign Relations and co-author with Mr. Litan of ‘Financial Statecraft’ (Yale University Press, 2006). The two argue that the globe’s mélange of 200-plus currencies, backed only by the faith of investors, is inefficient and dangerous. Many emerging economies, they say, would be well advised to swap their currencies for strong, stable, widely used ones like the dollar or euro.”