IESET.
Hypotheses·monetary·ecuador_dollarisation_2000_stabilisation

Ecuador's January 2000 unilateral dollarisation (in the wake of the 1998-1999 banking and currency crisis) produced a permanent break in the inflation series and a measurable stabilisation of macro outcomes relative to a Latin American non-dollarised peer pool over the subsequent two decades.

The pre-registered claim is (a) cpi inflation fell from above 90% (2000) to single digits by 2003 and remained below 5% mean annualised through 2019, AND (b) cumulative log GDP per capita 2000-2019 exceeds the LATAM 25th percentile. The mechanism is the imported nominal anchor: the central bank cannot finance fiscal deficits via inflation tax once domestic currency is abandoned. The hypothesis tests dollarisation as a successful nominal-anchor stabilisation rather than as a growth-enhancing structural reform.

PARTIALengine/runs/ecuador_dollarisation_2000_stabilisation

PARTIAL — mean_gap=+3.052, |gap|/pre_sd=0.26, p_perm=0.167; claim direction ambiguous

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

In plain terms, this asks whether dollarisation indicator is actually linked to better or worse cpi inflation yoy from 1995 to 2024.

plain answer

The evidence is suggestive but not decisive. mean_gap=+3.052, |gap|/pre_sd=0.26, p_perm=0.167; claim direction ambiguous

why it matters

This matters because monetary claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 7 country or place units from 1995 to 2024, using a synth did design.

what was measured
What changed
  • Dollarisation indicator
What we checked
  • Cpi inflation yoy
  • Log income pc constant
  • Gross capital formation share income
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/ecuador_dollarisation_2000_stabilisation
1007550250199520102024ECUPERCOLBOLBRAARGMEX
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show cpi_inflation_yoy across 7 sampled countries over 1995–2024.
The shapes above are stylised — none of the lines are real data.
Placeholder for ecuador_dollarisation_2000_stabilisation. Published chart will be generated from engine/runs/ecuador_dollarisation_2000_stabilisation/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T10:15:30Z

Ecuador's January 2000 unilateral dollarisation (in the wake of the 1998-1999 banking and currency crisis) produced a permanent break in the inflation series and a measurable stabilisation of macro outcomes relative to a Latin American non-dollarised peer pool over the subsequent two decades. The pre-registered claim is (a) cpi inflation fell from above 90% (2000) to single digits by 2003 and remained below 5% mean annualised through 2019, AND (b) cumulative log GDP per capita 2000-2019 exceeds the LATAM 25th percentile. The mechanism is the imported nominal anchor: the central bank cannot finance fiscal deficits via inflation tax once domestic currency is abandoned. The hypothesis tests dollarisation as a successful nominal-anchor stabilisation rather than as a growth-enhancing structural reform.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) mean cpi_inflation_yoy(ECU, 2003-2019) > 5%, OR (b) cumulative log_gdp_pc 2000-2019 (ECU) is below the LATAM 25th percentile, OR (c) the inflation break around January 2000 is not statistically distinguishable from zero in the event-study spec.

formal test & threshold
test:      synth_did_plus_event_study_inflation_break
threshold: mean_cpi_inflation_yoy(ECU, 2003-2019) <= 5 AND cumulative_log_gdp_pc(ECU, 2000-2019) >= LATAM_25th_percentile AND event_study_inflation_break(ECU, 2000-01) significant at p < 0.05

Method

Template
synth_did
Clustering
country
Sample
7 countries · 1995 – 2024
Evidence type
causal

Primary: synth_did with ECU treated from 2000, LATAM non-dollarised peers as donor pool. Secondary: event study around January 2000 on inflation and exchange-rate pass-through.

Data

VariableSourceTransform
cpi_inflation_yoy
outcome
world_bank_wdi:FP.CPI.TOTL.ZGtier 2
level
log_gdp_pc_constant
outcome
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
gross_capital_formation_share_gdp
outcome
world_bank_wdi:NE.GDI.TOTL.ZStier 2
level
fiscal_balance_share_gdp
outcome
imf:GGXCNL_NGDPtier 2
level
dollarisation_indicator
treatment
constructed:binary = 1 for ECU from 2000-01 onwardtier 5
binary
oil_price
control
fred:DCOILBRENTEUtier 1
log_level
us_policy_rate
control
fred:FEDFUNDStier 1
level
terms_of_trade
control
world_bank_wdi:TT.PRI.MRCH.XD.WDtier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — ecuador_dollarisation_2000_stabilisation

Verdict: PARTIAL — mean_gap=+3.052, |gap|/pre_sd=0.26, p_perm=0.167; claim direction ambiguous

Pre-registration

  • Claim: Ecuador's January 2000 unilateral dollarisation (in the wake of the 1998-1999 banking and currency crisis) produced a permanent break in the inflation series and a measurable stabilisation of macro outcomes relative to a Latin American non-dollarised peer pool over the subsequent two decades. The pre-registered claim is (a) cpi inflation fell from above 90% (2000) to single digits by 2003 and remained below 5% mean annualised through 2019, AND (b) cumulative log GDP per capita 2000-2019 exceeds the LATAM 25th percentile. The mechanism is the imported nominal anchor: the central bank cannot finance fiscal deficits via inflation tax once domestic currency is abandoned. The hypothesis tests dollarisation as a successful nominal-anchor stabilisation rather than as a growth-enhancing structural reform.
  • Falsification rule: Not supported if (a) mean cpi_inflation_yoy(ECU, 2003-2019) > 5%, OR (b) cumulative log_gdp_pc 2000-2019 (ECU) is below the LATAM 25th percentile, OR (c) the inflation break around January 2000 is not statistically distinguishable from zero in the event-study spec.

Synthetic-control estimate

  • shape: synth_did
  • treated_country: ECU
  • event_year: 2000
  • n_donors: 5
  • donor_weights (top): {'COL': 1.0, 'PER': 0.0, 'BOL': 0.0, 'BRA': 0.0, 'MEX': 0.0}
  • pre_rmse: 20.88354549938206
  • pre_period_sd: 11.832853334675177
  • mean_post_gap: 3.051608213230726
  • end_period_gap: -5.06176078112859
  • post_period_years: [2000, 2024]
  • placebo_p_value: 0.16666666666666666
  • n_placebos: 5
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • world_bank_wdi:FP.CPI.TOTL.ZG → cpi_inflation_yoy (outcome, n=9066)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_gdp_pc_constant (outcome, n=14131)
  • imf:GGXCNL_NGDP → fiscal_balance_share_gdp (outcome, n=8848)

Generated by scripts/run_synth_did.py at 2026-04-30T10:15:30+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Tests dollarisation as nominal-anchor success without claiming growth effects.

Authored framework. Read the transparency note.