Money and Banking 2

Does dollarization benefit developing countries? (550 Words minimun )

 

Dollarization occurs when a nation allows the currency of another nation to be used as a legal currency.  That is partial dollarization.  Full dollarization, while less frequent, occurs when a nation discontinues it’s own currency and replaces it with the currency of another country.  Most commonly the foreign currency is the US Dollar, but the Euro is used by a number of European countries that are not part of the European Union.

 

Review the Dollarization document provided, information in the textbook, as well as web based sources.  A good approach is to examine a specific country that has dollarized.  Dollarization.doc 

 

You then take the information you have learned and present it as a formal case study report.  For this case a specific recommendation is not required.  After a discussion of what dollarization is and the advantages and disadvantages of dollarization, you would conclude with a brief review of the conditions under which a country would benefit from dollarization.  That becomes an implicit recommendation to dollarize when those conditions exist.  Alternatively, if you conclude that dollarization is not a benefit, then you would explain why you recommend that nations not dollarize.

 

Case Studies follow the following general format:

 

•An Introduction where you explain the situation and the decision(s) facing the firm. Most, if not all, of this information will be in the case.

 

•Alternatives: here you define terms as needed and identify the alternative available to the firm.

 

•Evaluate the alternatives: discuss the advantages and disadvantages of each of the relevant alternatives.

 

•Recommendation and conclusion: select one of the alternatives as your recommendation. Support your recommendation with information used in your case analysis.

 

Provide specific and detailed recommendations.

 


 

•Use additional resources as needed, but remember to cite and reference them properly using APA style. (Apa.pptx).

 

•In a case you apply your knowledge of the material being covered in the class. As well as using your analysis skills as applied to the case information.

 

Note: For a short case such as this one, the Alternatives discussion can be combined with the Evaluation discussion as single section of your case.

Be sure to include APA formatted citations and references.