Since the 1970s, a number of high-inflation Latin American countries have experienced a persistent process of "dollarization". To interpret some of the stylized facts, this paper presents a simple model in which dollarization reflects the fact that there are costs involved in switching the currency denomination of transactions. The transaction costs of dollarization define a band for the inflation differential within which there will be no incentive to switch between currencies.

This paper examines the effects on the supply of money and credit of a repatriation of foreign assets in an economy subject to currency substitution. In the absence of 100% reserve requirements, such a change in the location of deposits , which is not compensated by an increase in money demand, induces a credit boom that works itself out through a transitory current account deficit and real currency appreciation. These results are illustrated with data from the recent experience in Argentina and Peru where local banks have been authorized to capture dollar deposits from residents.

"I must now once again confess that I do not have a general theory of dictatorship or a general theory of how dictators stay in power. I've been concerned about the problem of dictatorship for almost as long as I've been interested in public choice... The reasons that my writings have mainly been concerned with democracies is simply that dictatorship turns out to be a very difficult subject."

Gordon Tullock, Autocracy. Dordrecht, The Netherlands: Kluwer Academic Publishers, 1987, p. 18.

Durante mucho tiempo el dumping ha sido considerado como un problema en el comercio internacional, una práctica desleal que interfiere en un orden liberal y que se origina en imperfecciones de los mercados: poder monopólico, barreras al comercio, diferentes sistemas económicos. En un mundo libremente competitivo los bienes se producirían en cada país de acuerdo con el principio de la ventaja comparativa y los precios se igualarían al nivel único que despeja los mercados.