A plan for dollarizing Argentina

Abstract. For many reasons, dollarization is an efficient and realistic option for this country. Yet, in order to last, it must be able to withstand banking panics without the assistance of a conventional lender of last resort and the lobby of protected industries to revoke dollarization. To this end, we advance a model of commercial banking close to that of Panama, under foreign law, and argue for free trade agreements with superpowers to smooth out real-exchange rate fluctuations.Keywords. Country risk, Zero-trust country, Currency substitution, Irreversible reforms, Panama, Branch banking.JEL. E02, E42