How might liability dollarization worsen financial market


Problem

In some emerging market economies, not only are debt obligations to foreigners denominated in dollars, but so are many of the economies' internal debts, that is, debts of one domestic resident to another. This phenomenon is sometimes called liability dollarization. How might liability dollarization worsen the financial market disruption caused by a sharp depreciation of the domestic currency against the dollar?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: How might liability dollarization worsen financial market
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