Dollarization And The Single Currency In The Americas

AbstractDollarization is not a fire-new problem in the theory But recently it becomesthe hotspot again in the internationaI monetary system aIong with the changes of theinternationa1 financial situations. Especially in the l990s there are two importanttrends in the international financial fields, which carve out some new spaces fOr thestudy on doI1arization. The first one is the outbursts of a series of financial crises,which causes the shrink of kinds of assets, the decIine of the economy, the drop ofthe people's living standard, especially the politica1 crises and the turbulence of thesociety. All of above shows that the existent international monetary system can'tmaintain and need a reform facing the floating international capital and the effect ofthe infeCtion. The second one is the start-up of the Euro on Jun 1,l999. The..economics in Euro area is steady and healthy and out of the impact of the financialcrises, which offers a objective choice to the refOrm of the internationa1 monetarysystem. TherefOre, to study the dolIarizatio[1 and connect it With tl1e American SingleCurrency objectively is the basic thought of this thesis.There are two parts in this tl1esisThe first part includes the concept, the background of do11arization and pointout that the essence of dollarization is the currency substitution In this part we alsodiscuss the measure and allotment of the seigniorage in the full dolIarization All ofthese lay a good foundation fOr the second part.The second part of this thesis focuses on the Arnerican Single Currency Afterintroducing the Optimal Currency Area Theory the thesis anaIyzes the background ofthe American Sing1e Currency. On the currency histocy and experience in Americaand the stepwise foundation of the AFTA, the thesis emphasizes the insistentrequirement fOr the Area Single CurrencyThe discussion about the for111ing mechanis1n of tl1e An1erican Si11gIeCurrency is the l1i11ge of tl1e two paIts Connecting Witl1 the curre11t situation ofAlnerica, lt co11c1udes tl1at dollarizatiol1 is the inevitable cl1oice in tl1e process of theAmerican Single Currency.Moreover, in the second part the cost-income analysis about the American Single Currency has been discussed in details. It shows that under the situation that the levels according with the standards of the OCA keep unaltered, the balanced point could displace. The integrative requirements for the Currency Area could be reduced.As the most important thing in the international financial field in the late 20th century, the occur and practice of Euro offers American Single Currency much reference. Therefore, the last problem in the second part is to introduce the experience from the Euro area to the Dollar area.At the end of this thesis we prospect the process of the dollarizat ion in the America and point out four key factors: the ascription of the seigniorage, the stretch of the purview of the FRS, the mechanism of the monetary policies?decision and the resistance from the politics. Contrast with the European Monetary Union, dollarization as the machenism of American Single Currency is a kind of second-best choice; Contrast with the Euro, the process of the American Single Currency is more complicated and has more uncertainty. But as a profitable attempt, Area Single Currency shows its hearty life-force day by day. Dollarization which connects with the current conditions of America has been accepted by people and come on the stage of the international monetary system.