JavaScript is disabled for your browser. Some features of this site may not work without it.
  • About K
  • Academics
  • Admission
  • Alumni Relations
  • Giving to K
  • News & Events
  • Student Life
  • HORNET HIVE
  • ATHLETICS
  • SITEMAP
  • WEBMAIL
    • Login
    View Item 
    •   CACHE Homepage
    • Academic Departments, Programs, and SIPs
    • Economics and Business
    • Economics and Business Senior Integrated Projects
    • View Item
    •   CACHE Homepage
    • Academic Departments, Programs, and SIPs
    • Economics and Business
    • Economics and Business Senior Integrated Projects
    • View Item

    An Analysis of Dollarization and its Effects on the Ecuadorian Tourism Industry

    Thumbnail
    View/Open
    Searchable PDF / Kalamazoo College Only (3.077Mb)
    Date
    2003
    Author
    Petz, Scott Allen
    Metadata
    Show full item record
    Abstract
    The world financial crisis, el nifio, the drop in oil prices, the collapse of the banking sector, the border dispute with Peru, and the eruption of volcanoes all contributed to the economic and political instability in which Ecuador found itself prior to dollarization. For these reasons, the dollarization decision was not a carefully calculated and informed one. Rather, it was made in haste during a time of turmoil for Ecuador. It was theorized that dollarization would establish greater fiscal austerity, guide all factors of production toward greater efficiency, and create a predictable environment for investing typified by stable interest rates and prices. By analyzing the tourism industry of Ecuador it is suggested that dollarization does not deliver on all its promises. Inflation is going up still, interest rates are still too high to promote substantial amounts of investment, and the current account deficit is growing. Due to dollarization, Ecuador is losing international competitiveness. The appreciation of the real exchange rate has created a mismatch between the quality of prices and goods, commodities, and services. The pre-conditions for the success of dollarization were not in place. A sustainable fiscal position, well functioning labor markets, the proper legislation, and the enforcement of laws were lacking. The authorities were concerned with implementation rather than sustainability. Dollarization in Ecuador could lead to a financial crisis comparable to that of Argentina's. If faced with a crisis, it is possible that Ecuador would have to create a new currency and financial system. Ecuador should consider ridding itself of dollarization before dollarization gets rid of it. Dollarization is not inherently bad, even though it may not be the answer for Ecuador. As countries stray away from floating exchange rate regimes and the traditional fixed exchange regimes in search for economic stability, the lessons from Ecuador will be of great importance.
    URI
    http://hdl.handle.net/10920/26616
    Collections
    • Economics and Business Senior Integrated Projects [1202]

    Browse

    All of CACHECommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsThis CollectionBy Issue DateAuthorsTitlesSubjects

    My Account

    Login

    DSpace software copyright © 2002-2023  DuraSpace
    DSpace Express is a service operated by 
    Atmire NV
    Logo

    Kalamazoo College
    1200 Academy Street
    Kalamazoo Michigan 49006-3295
    USA
    Info 269-337-7000
    Admission 1-800-253-3602

    About K
    Academics
    Admission
    Alumni Relations
    Giving to K
    News & Events
    Student Life
    Sitemap
    Map & Directions
    Contacts
    Directories
    Nondiscrimination Policy
    Consumer Information
    Official disclaimer
    Search this site


    Academic Calendars
    Apply
    Bookstore
    Crisis Response
    Employment
    Library
    Registrar
    DSpace Express is a service operated by 
    Atmire NV