Inflation, currency substitution and dollarization: The case of Argentina

This dissertation discusses the relationship between inflation, currency substitution and dollarization that has taken place in Argentina for the past several decades.^ First, it is shown that when consumers are able to hold only domestic monetary balances (without capital mobility) an increase in the rate of inflation will produce a balance of payments deficit. We then look at the same issue but with heterogeneous consumers, this heterogeneity being generated by non-proportional lump-sum transfers.^ Second, we discussed some necessary assumptions related to currency substitution models and concluded that there was no a-priori conclusion on whether currencies should be assumed to be "cooperant" or "non-cooperant" in utility. That is to say, whether individuals held different currencies together or one instead of the other.^ Third, we went into discussing the issue of currency substitution as being a constraint on governments' inflationary objectives rather than a choice of those governments to avoid hyperinflations. We showed that imperfect substitutability between currencies does not "reduce the scope for rational (hyper)inflationary processes" as it had been previously argued. It will ultimately depend on the parametrization used and not on the intrinsic characteristics of imperfect substitutability between currencies.^ We further showed that in Argentina, individuals have been able to endogenize the money supply by holding foreign monetary balances. We argued that the decision to hold foreign monetary balances by individuals is always a second best due to the trade-off between holding foreign monetary balances and consumption. For some levels of income, consumption, and foreign inflation, individuals would prefer to hold domestic monetary balances rather than foreign ones.^ We then modeled the distinction between dollarization and currency substitution. We concluded that although dollarization is necessary for currency substitution to take place, the decision to use foreign monetary balances for transactions purposes is largely independent from the dollarization process.^ Finally, we concluded that Argentina should not fully dollarize its economy because dollarization is always a second best to using a domestic currency. Further, we argued that a fixed exchange system would be better than a flexible exchange rate or a "crawling-peg" system because of the characteristics of the political system and the possibilities of "mass praetorianism" to develop, which is intricately linked to "populist" solutions. ^

Successful and sustained leadership: A case study of a Jesuit high school president

Fr. Marcelino García, S.J. has been the president of Belen Jesuit Preparatory School for 25 years. The longevity and success of his tenure is an exemplary case of effective leadership and provided significant insight into what constitutes effective school leadership. The target population for this case study consisted of the school’s 7 administrators, 90 faculty members, 10 English-speaking staff members, and 3 key informants. Data were collected using Bolman and Deal’s (1997) Leadership Orientation Survey along with the Jesuit Secondary Education Administration’s (1994) Administrative Leadership Profile Survey (ALPS). Data collected from the surveys were analyzed using the SPSS, version 10. The study also included data collected from focus interviews with Fr. García and six other significant members of the school community. The interviews were approximately 1-hour individual interviews that employed a semi-structured guide. A concurrent triangulation method was used that directly compared the results from these data collection methods. This was done by looking at the data as a whole and in parts. The parts were internal (faculty, administrators, and staff) and external (parents, alumni, and the superior of the Jesuit community) sectors. The comparison of the findings was then examined in terms of each research question. Analysis of the data revealed that while Fr. García’s predominant leadership style reflected the typical Bolman and Deal characteristics associated with the political frame, his leadership demonstrates access to all four frames. Research has found a correlation between multiple frame use and successful leadership. Relatedly, Fr. García’s capacity to approach his administration from various perspectives is indicative of success. In addition, from the perspective of Jesuit education, an analysis of Fr. García’s leadership indicated recurring themes that contributed to the school’s organizational health. The results of this study provide an extensive analysis of the administration of a unique leader. An analysis of Fr. García’s leadership style from two perspectives gives fresh insight into sustained and successful leadership.

Inflation, currency substitution, and dollarization : the case of Argentina

This dissertation discusses the relationship between inflation, currency substitution and dollarization that has taken place in Argentina for the past several decades. First, it is shown that when consumers are able to hold only domestic monetary balances (without capital mobility) an increase in the rate of inflation will produce a balance of payments deficit. We then look at the same issue but with heterogeneous consumers, this heterogeneity being generated by non-proportional lump-sum transfers. Second, we discussed some necessary assumptions related to currency substitution models and concluded that there was no a-priori conclusion on whether currencies should be assumed to be "cooperant" or "non-cooperant" in utility. That is to say, whether individuals held different currencies together or one instead of the other. Third, we went into discussing the issue of currency substitution as being a constraint on governments inflationary objectives rather than a choice of those governments to avoid hyperinflations. We showed that imperfect substitutability between currencies does not "reduce the scope for rational (hyper)inflationary processes" as it had been previously argued. It will ultimately depend on the parametrization used and not on the intrinsic characteristics of imperfect substitutability between currencies. We further showed that in Argentina, individuals have been able to endogenize the money supply by holding foreign monetary balances. We argued that the decision to hold foreign monetary balances by individuals is always a second best due to the trade-off between holding foreign monetary balances and consumption. For some levels of income, consumption, and foreign inflation, individuals would prefer to hold domestic monetary balances rather than foreign ones. We then modeled the distinction between dollarization and currency substitution. We concluded that although dollarization is necessary for currency substitution to take place, the decision to use foreign monetary balances for transactions purposes is largely independent from the dollarization process. Finally, we concluded that Argentina should not fully dollarize its economy because dollarization is always a second best to using a domestic currency. Further, we argued that a fixed exchange system would be better than a flexible exchange rate or a "crawling-peg" system because of the characteristics of the political system and the possibilities of "mass praetorianism" to develop, which is intricately linked to "populist" solutions.