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The Cost of Losing Monetary Independence: The Case of Mexico

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  • Cooley, Thomas F
  • Quadrini, Vincenzo

Abstract

This paper develops a two-country monetary model calibrated to data from the United States and Mexico to address the question of whether dollarization is welfare improving for the two countries. Our findings suggest that dollarization is not necessarily Pareto superior to monetary independence for Mexico.

Suggested Citation

  • Cooley, Thomas F & Quadrini, Vincenzo, 2001. "The Cost of Losing Monetary Independence: The Case of Mexico," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 370-397, May.
    • Handle: RePEc:mcb:jmoncb:v:33:y:2001:i:2:p:370-97
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