This paper examines the advantages and disadvantages of full dollarization. It considers emerging market economies in South America exposed to volatility, but that do a fair amount of trade with the United States. For a fully dollarized economy, seigniorage revenues would be small if not non-existent, and exposures of banks and businesses would be greater to financial instability and external shocks without the policy instrument of monetary policy. In addition, the exchange rate would not serve as a policy instrument since prices would be pegged to the dollar. However, the experiences of some South American countries demonstrate some marginal benefits which contribute.
Labor Market Monopsony: An Overview (2014)
This paper provides of overview of the concept of monopsony as it applies to the labor market recent labor market in the recent research literature. Monopsony, in this case, specifically refers to the situation where firms face an upward sloping supply curve which gives them a non-negligible amount of market power over wages. Search models, job differentiation, flow models, oligopsony, and risk aversion all provide an intuitive understandings for which to characterize the labor market in terms of the upward sloping labor supply curve facing firms. Based on the literature, it appears widely accepted that firms do have monopsony power in the short-run in part due to some of these explanations which are elaborated upon in this overview.
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