by Karla Pintor
The paper discusses the Ecuadorian economic crisis in 1999, dollarization, and volatility in inflation rates during the 2008 Economic Crisis and the COVID-19 pandemic. Trends in Ecuador’s inflation rates since dollarization are investigated and compared with other dollarized countries in Latin America and former dollarized countries that are currently using domestic currencies. Ecuador’s inflation rates since dollarization have significantly decreased since 2000 and have shown no dramatic effect on inflation rates during economic crises. Additionally, Ecuador’s inflation rates are like those in stable dollarized countries and more reliable than de-dollarized countries. Given these results, dollarization can be used to aid countries currently facing hyperinflation, like Argentina.
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