Karlin Saori Ishii

This work analyses the choice of the exchange rate regime, mainly for the developing countries, in an environment of international financial and economic instability. For this, it had been shown diverse exchange rate regimes in accordance with standard classification of the IMF (International Monetary Fund) and the discussion about the disappearance of intermediate regimes, demonstrating the advantages of the corner solution . It was also demonstrated, exchange rate regimes relating them with the macroeconomic performance. In this case, it was standed out that intermediate exchange rate, although to be very used due to the fear of floating and the instability of fixed exchange rate regimes (conventional), had been the worst macroeconomic performances. Being thus, one of the alternatives cogitated for the Latin American countries is the dollarization, therefore this is a regime that generates minor instability in comparison with the traditional fixed exchange rates. The stability proceeding from the dollarization drift of the fact of it to be irrevocable and, therefore, not feasible to occur speculative attacks. To evaluate the validity of the theoretical conclusions favorable to the dolarização the case of the Equator is studied, because, it is the biggest country to pass for the dollarization process. The conclusion is that the dollarization is not a good alternative for countries with great exchange instability of prices and nor for the countries with prices and steady exchange rate, therefore the deriving benefits of the dollarization seems to be lesser that the costs.