"Reserves Internacionales/Liquididez en Moneda
Primer," Universidad Torcuatro DiTella, July 2001,
Extranjera," www.bcra.gov.ar/pdfs/contad/ temp0202.pdf.
www.utdt.edu/~fsturzen/CHAPTER1.pdf;
Nouriel Roubini, "Should Argentina Dollarize or
26. Decree 214/2002; Banco Central de la República
Float? The Pros and Cons of Alternative Exchange
Argentina, Communicación "A" 3468, February 8,
Rate Regimes and Their Implications for Domestic
2002, www.bcra.gov.ar/folio/A3468.pdf.
and Foreign Debt Restructuring/ Reduction," New
York University, December 2, 2001, www.
27. U.S. Department of the Treasury, The Use and
stern.nyu.edu/ globalmacro; Journal of Money,
Counterfeiting of United States Currency Abroad, January
Credit, and Banking 33, no. 2, part 2 (May 2001); and
2000, p. 19, www.federalreserve.gov/boarddocs/
Journal of Policy Modeling 23, no. 3 (April 2001).
RptCongress/conterfeit.pdf; Eduardo Levy Yeyati, "10
años de convertibilidad: la experiencia argentina,"
35. See Kurt Schuler, "What Use Is Monetary
Universidad Torcuatro di Tella, p. 41, www.utdt.
Sovereignty?" August 2000, users.erols.com/kurrency/
edu/~ely/Convertibilidad.pdf.
monsov.htm.
28. Banco Central de la República Argentina,
36. Banco Central de la República Argentina,
Información Monetaria y Financiera Mensual, March
Communicación "A" 3467, February 8, 2002,
2002, www.bcra.gov.ar/pdfs/estadistica/bol0402.pdf.
www.bcra.gov.ar/folio/a3467.pdf.
29. One writer who has voiced concern about this
37. For accounts of Ecuador's experience under dollar-
matter, though acknowledging that the problem
ization so far, see Paul Beckerman, "Dollarization and
may be avoidable, is Gerardo Tresca, El Espejismo de
Semi-Dollarization in Ecuador," World Bank Working
la Convertibilidad: La Economía Argentina en la Década
Paper 2643, July 17, 2000, econ.worldbank.org/files/
del Noventa (Buenos Aires: Ediciones Realidad
2322_wps2643.pdf; Carlos Julio Emanuel (Ecuador's
Argentina, 2000), p. 228.
minister of economy and finance), "La dolarización y
el paso a la economía real," January 16, 2002, minfi-
30. Theoretically, banks can gain all the reserves
nanzas.ec-gov.net/docs/economia.doc; Franklin A.
they need from inflows of deposits and need hold
López, "Dollarization in Vulnerable Economies: The
no initial reserves.
Lessons from Ecuador," University of New Orleans,
April 2002, 150.108.69.10/public/m-union/ abstracts/
31. As a very rough guide to establishing a fixed
lopezpaper.pdf; and IMF information at www.imf.
exchange rate immediately, Gabriel Rubinstein's
org/external/country/ECU/index.htm. For official
concepts of a "dollar of maximum confidence"
statistics, see the Banco Central del Ecuador's weekly
and a "dollar of minimum" confidence are help-
Boletín de Coyuntura www.bce.fin.ec/indicadores/
ful. See his Website, www.econline.com.ar.
semanal/ bol_sem.htm.
32. Why not try to return to the former exchange
38. Gabriel Rubinstein, and, I am told, econo-
rate of 1 peso per dollar? Doing so would imply a
mists from Universidad del CEMA.
deflation to reverse the inflation that has occurred
since the peso was devalued. Other things being
39. I first discussed this idea in Kurt Schuler, "U-Turn
equal, it would also require the central bank to
Out of the Dead End: How to Solve Argentina's Debt,
have much larger dollar reserves than it now does,
Currency, and Banking Problems," manuscript,
so as to be able to convert the peso monetary base
August 16 and 27, 2001.
into dollars at a more appreciated exchange rate.
Argentina is highly unlikely to obtain a loan of the
40. Banks with branches in the United States may even
scale necessary to boost the central bank's dollar
wish to issue notes there. Federally chartered banks in
reserves sufficiently.
the United States have had the capacity to issue notes
since 1994 (for the first time since 1935). One reason
33. Established by Decree 214/2002; see also Banco
they have not issued notes is that they have been
Central de la República Argentina, Communicación
unaware that the law allows them to do so. See Kurt
"A" 3507, March 13, 2002, www.bcra.gov.ar/folio/
Schuler, "Note Issue by Banks: A Step toward Free
a3507.pdf. For the CER itself, see Banco Central de
Banking in the United States?" Cato Journal 20, no. 3
la República Argentina, www.bcra.gov.ar/pdfs/
(Winter 2001): 45365, www.cato.org/pubs/journal/
estadistica/cer2002.xlw.
cj20n3/cj20n3-8.pdf. Bank-issued notes in the United
States are subject to a tax of 1 percent a year under the
34. Kurt Schuler and Steve H. Hanke, "How to
United States Code, title 12, section 541.
Dollarize in Argentina Now," December 20, 2001,
and January 2, 2002, pp. 31333, users.erols.
41. It has been claimed that a reasonable estimate
com/kurrency/argjdec01f. For sample objections
of the present value of seigniorage is 23.8 percent
from blackboard economics, see Eduardo Levy
of GDP, although the value could be significantly
Yeyati and Franco Sturzenegger, "Dollarization: A
higher or lower depending on various factors.
35