tcmb speech, 2006-12-15
The costs of even a fully credible full dollarization policy are also clear: they are that the exchange rate is no longer available as an adjustment mechanism: adjustments that could otherwise be made by allowing the exchange rate to change - and that is the most natural adjustment mechanism to macroeconomic shocks, foreign and domestic - then have to be transferred to domestic prices and wages.
Sentiment: neutral
Topic: mp_economic_activity