Full dollarisation and economic performance revisited

Thornton, John and Vasilakis, Chrysovalantis (2025) Full dollarisation and economic performance revisited. International Journal of Finance and Economics. ISSN 1076-9307

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Abstract

This paper examines the economic performance of fully dollarised economies compared to those with alternative monetary regimes. Using an extensive dataset covering 192 countries from 1980 to 2021, we employ a variety of econometric techniques, including joint maximum likelihood and propensity score matching, to address endogeneity and unobserved heterogeneity. Our findings show that fully dollarised economies exhibit higher and more stable GDP growth, alongside lower inflation and reduced volatility. These results are robust across multiple estimation methods and control groups. Contrary to previous studies, we demonstrate that full dollarisation may be consistent with relatively higher GDP growth as well as lower and more stable inflation rates, challenging the widely held view that it leads to poor economic performance.

Item Type:	Article
Additional Information:	Publisher Copyright: © 2025 The Author(s). International Journal of Finance & Economics published by John Wiley & Sons Ltd.
Uncontrolled Keywords:	gdp growth,full dollarisation,inflation,volatility,economics and econometrics,accounting,finance ,/dk/atira/pure/subjectarea/asjc/2000/2002
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
Related URLs:	http://www.scopus.com/inward/record.url?... https://research.bangor.ac.uk/en/publica...
Depositing User:	LivePure Connector
Date Deposited:	06 Jan 2026 16:30
Last Modified:	07 Jan 2026 12:30
URI:	https://ueaeprints.uea.ac.uk/id/eprint/101544
DOI:	10.1002/ijfe.70124

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