The soft infrastructure of a market economy

Article Abstract:

The basic institutions of a market economy are the legal system, accounting system and cultural attitudes. The legal system is founded on an explicit commercial code that recognizes property rights and on commercial courts that resolve disputes. The accounting system provides the market's need for common financial accounting rules and an independent auditing system which is sadly lacking in socialist economies. The third institution is cultural attitudes characterized by the mutual desire between contracting parties for continued relations based on trust.

Analysis, Infrastructure (Economics), Free enterprise

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Dollarization for Latin America?

Article Abstract:

The US should not impose its dollar system on Latin America to stabilize its currencies but should be willing to dollarize if a Latin American nation would make such a request. The US could offset the loss of seignorage to the foreign central bank by supplying dollars to the foreign country at cost.

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Official versus spontaneous dollarization

Article Abstract:

Latin American countries may be able to change their inflationary past by permitting open circulation of foreign moneys in competition with local currency. This policy could protect Latin American economies from erratic behavior by their central banks.

Standards, Evaluation, Competition (Economics), Prevention, Inflation (Finance), Money

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