Official dollarization discussions: An assessment of the Ecuador economy (2000-2020)

This study was carried out to determine the place of full dollarization in alternative monetary regimes and to determine how Ecuador's macroeconomic indicators are affected by full dollarization. In the study, a qualitative research design was preferred and a reflective and explanatory model was adopted. In order to examine the effects of full dollarization on the Ecuadorian economy, economic growth, inflation, unemployment, current account deficit, real effective exchange rate, foreign debt and interest indicators were used. After full dollarization, it was determined that Ecuador's inflation rates approached the US rates, a sharp decrease in interest rates was achieved, but the instability in growth continued. Insisting on a growth model dependent on oil exports, preferring external borrowing as a compensation for the ever-increasing public expenditures, and inability to allocate foreign debt to areas with high added value; considered as the main sources of instability in growth. It has been determined that the same reasons create an obstacle to maintaining the current account deficit in a high quality manner. As a result, the findings pointed to the importance of structural reforms in full dollarization and showed that full dollarization regime would not be sufficient on its own to provide macroeconomic stability.