Monetary Dynamics in Dollarized Economies: The Case of Ecuador

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Publicado: dic 27, 2025
DOI: https://doi.org/10.47550/RCE/35.2.3
Palabras clave:
Dollarization, Money view, Central bank, Money creation, International reserves Ecuador

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Juan Pablo Erraez
Investigador Independiente
https://orcid.org/0009-0002-7941-6860
Juan Lorenzo Maldonado
Investigador Independiente
https://orcid.org/0009-0002-2331-4961

Resumen

This paper develops a conceptual balance-sheet framework to analyze monetary dynamics in dollarized economies, using Ecuador as a case study. It explores the interaction between balance of payments flows, central bank operations, and private credit creation, emphasizing the role of high-powered money in sustaining domestic liquidity. The paper highlights the risks from central bank balance sheet expansion and non-monetary mechanisms such as cross-holdings of claims between deposit-taking institutions and fiscal spending financed by domestic debt. It argues that monetary stability in dollarized regimes depends critically on institutional arrangements and reserve adequacy, offering insights for policymakers, analysts, and investors seeking to understand macroeconomic vulnerabilities in similar settings.

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Erraez, J. P., & Maldonado, J. L. (2025). Monetary Dynamics in Dollarized Economies: The Case of Ecuador. Cuestiones Económicas, 35(2), Autores: Juan Pablo Erraez and Juan Lorenzo Maldonado. https://doi.org/10.47550/RCE/35.2.3
Número
Vol. 35 Núm. 2 (2025): Revista Cuestiones Económicas
Sección
Artículos de Investigación
Creative Commons License
Esta obra está bajo licencia internacional Creative Commons Reconocimiento-NoComercial 4.0.

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