Microeconomic effects of macroeconomic policy changes in Ecuador: potato production after dollarization
Ecuador dollarized its economy to avert an economic crisis and has achieved this goal for the time being. While the entire country may have benefited from dollarization, the impact on specific sectors within the Ecuadorian economy is less clear. This study investigates the impact of dollarization on potato production in the provinces of Carchi and Chimborazo. Semi-structured interviews were conducted with farmers in both provinces to determine the effects of dollarization on potato farming. The results suggest that dollarization has eroded the competitive advantage of potato farmers in both provinces, with the impact being greater in Carchi. In addition, potato supply functions were estimated for each province and the results here suggest that potato supply has become more responsive to changes in several explanatory price variables after dollarization.