Unravelling the Persistence of Dollarization: The Case of Georgia (Europa Economic Perspectives)

"This volume engages with the roots, dimensions and implications of foreign currency domination in states with a national currency. Referred to as unofficial dollarization in literature, this is a worldwide phenomenon among developing countries and has a long history. This monograph provides a political economic analysis of dollarization in Georgia and is structured around three themes: the genesis of dollarization (1991-2003), the persistence of dollarization (2003-12) and the politicization of dollarization (2012-19). The case of Georgia is especially representative of the post-socialist transition states, but also has wider applicability. A high level of dollarization is a significant barrier to economic growth, macroeconomic and political stability, functional monetary policy, as well as social welfare. The Covid-19 crisis and the increasing debt of developing countries in foreign currency exacerbate dollarization-related vulnerabilities for these economies. This book will be of interest to postgraduate students in global/comparative political economy, development economics or transition economies, researchers in monetary sovereignty, central banking, exchange rate policies, currency hierarchy, money, financialization, and policy makers in dollarized countries and global institutions"-- Provided by publisher This volume engages with the roots, dimensions, and implications of foreign currency domination in states with a national currency. Referred to as unofficial dollarization in literature, this is a worldwide phenomenon among developing countries and has a long history. Cover 1 Endorsements 2 Half Title 4 Series Page 5 Title Page 6 Copyright Page 7 Dedication 8 Table of Contents 10 List of illustrations 12 Abbreviations 14 The author 16 Acknowledgements 17 PART I: Dollarization and its discontents 20 1. Introduction: Why does dollarization matter and what is at stake? 22 2. The obscurities of dollarization 29 PART II: The genesis of dollarization 52 3. Dollarization within the agenda of dollar diplomacy and transition 54 4. The Georgian state as a vessel of dollarization 72 5. Hyperinflation: The origins of dollarization and the birth of the lari 94 6. A new financial system meets dollarization 112 PART III: The persistence of dollarization 126 7. The birth of the new Georgian state 128 8. Peripheral financialization and the persistence of dollarization 157 PART IV: The politicization of dollarization 202 9. The politicization of dollarization: the currency crisis unfolding 204 10. Conclusion 236 11. Annex 1 243 Index 250 1,Introduction:,Why,does,dollarization,matter,and,what,is,at,stake?;,2,The,obscurities,of,dollarization;,3,Dollarization,within,the,agenda,of,dollar,diplomacy,and,transition;,4,The,Georgian,state,as,a,vessel,of,dollarization;,5,Hyperinflation:,The,origins,of,dollarization,and,the,birth,of,the,lari;,6,A,new,financial,system,meets,dollarization;,7,The,birth,of,the,new,Georgian,state;,8,Peripheral,financialization,and,the,persistence,of,dollarization;,9,The,politicization,of,dollarization:,the,currency,crisis,unfolding;,10,Conclusion;,11,Annex,1 1 Introduction: Why does dollarization matter and what is at stake?,2 The obscurities of dollarization,3 Dollarization within the agenda of dollar diplomacy and transition,4 The Georgian state as a vessel of dollarization,5 Hyperinflation: The origins of dollarization and the birth of the lari,6 A new financial system meets dollarization,7 The birth of the new Georgian state,8 Peripheral financialization and the persistence of dollarization,9 The politicization of dollarization: the currency crisis unfolding,10 Conclusion,11 Annex 1