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.
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.