But it is also a dangerous course of action for those countries that might one day find themselves having to change the exchange rate. There is some evidence that the provision of price-indexed financial assets helps reduce the extent of dollarization. That makes considerable sense, since the underlying issue for asset-holders is increasing the safety of their portfolios.
For example, wages tend not to decline during periods of high unemployment as much as our models might predict, and when the economy recovers, there is a lag before average wages respond.