Collar Denominated Accounts in Latin America.

This reading provides a very concise and brilliant history of the dollar denominate accounts in Latin America besides taking on the issue of how such accounts can further de-stabilize the different monetary as well as fiscal variables which could have otherwise function properly

The authors of this research concentrated on two broader themes of whether the dollar denominated accounts have any correlation with the different macroeconomic variables and secondly , if there is any correlation , does that relationship affects any of the macroeconomic variables , whether at the individual level or at the macroeconomic

br level . The authors also discussed the impact or correlation of the dollar denominated accounts on different macroeconomic variables in short term as well as long term and did manage to find some positive correlation between different variables and the dollar denominated accounts

The authors first discussed the reasons behind the increase in the use of dollar denominated accounts in different countries of Latin America as a consequence of the economic volatility in the different economic variables . This economic volatility resulted into the growing skepticism about the future expectations of the changes in the value of the local currency which actually prompted people to hold most of their assets in dollars in to hedge themselves against the volatile movements in local currency . The next major theme on which authors concentrated their focus was on assessing how the dollar denominated accounts interacts with the local banking environment and whether there exists any relationship between the performances of the...