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> My knowledge of political economy, trade and finance is woefully > lacking, so I was curious as to whether others (with better > micro-macroeconomic acumen) on the list could comment on the possible > short-term and long-term effects of 'dollarization' -- effects that > can be, I assume, both positive and negative. Dear Brian, One of the most basic economic perceptions is that the actual unit of account used should not make much economic difference as long as it possesses certain characteristics like stability (i.e. predictable or low inflation). The question of who controls the currency supply is important as that body will set monetary policy: if the US dollar is used, Iraq will ride the coat tails of monetary policy designed for the US; if a currency specific to Iraq is used, then it is more likely that the monetary policy behind it will be sensitive to Iraqi economic needs. Iraqis have been quite happy to trade US$ throughout the 1990s. I suspect, though, that many would see a US-instigated replacement of the Iraqi dinar by the US$ as a step toward colonisation rather than toward independence. Britons may not like the Queen, but most would oppose an attempt by Brussels to replace by force her image on British currency. Best, Colin Rowat work | Room 406, Department of Economics | The University of Birmingham | Birmingham, B15 2TT, UK | web.bham.ac.uk/c.rowat | (+44/0) 121 414 3754 | (+44/0) 121 414 7377 (fax) | email@example.com personal | (+44/0) 7768 056 984 (mobile) | (+44/0) 7092 378 517 (fax) | (707) 221 3672 (US fax) | firstname.lastname@example.org _______________________________________________ Sent via the discussion list of the Campaign Against Sanctions on Iraq. To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-discuss To contact the list manager, email email@example.com All postings are archived on CASI's website: http://www.casi.org.uk