The Money Doctor 💊💵

I’ve often been called the “money doctor” for my role in curing hyperinflations. Since the 1980s, I’ve traveled the globe advising governments on how to stabilize their currencies. Over the years, I’ve served as an economic advisor to heads of state, finance ministers, and was a senior economist on President Reagan’s Council of Economic Advisers in the United States. My expertise lies in designing currency boards, implementing dollarization programs, and crafting anti-inflation strategies. I played a significant role in helping establish new currency regimes in countries such as Argentina, Estonia, Bulgaria, Bosnia-Herzegovina, Ecuador, Lithuania, and Montenegro. In 1998, World Trade Magazine recognized my contributions by naming me one of the 25 most influential people in the world.

Argentina (1989–1991 and beyond)

I first got involved in Argentina in the late 1980s, during a time of severe hyperinflation. In 1989, President Carlos Menem consulted me as the country’s economy spiraled out of control. Along with my colleague Kurt Schuler, I proposed a classical currency board to peg the Argentine austral—and later the peso—to the U.S. dollar. We even co-authored a book, ¿Banco Central o Caja de Conversión?, laying out the case in detail. While Argentina implemented a modified version of our proposal through the Convertibility Plan, and inflation did fall significantly, the country never fully dollarized. Still, I continued to weigh in on Argentina’s monetary issues for decades. In 2023, I found myself again at the center of Argentina’s monetary debate as a new push for dollarization emerged under Javier Milei. I’ve written extensively urging the country to abandon the peso and shut down its central bank, arguing that full dollarization is the only way to break free from chronic inflation, high interest rates, and currency depreciation.

Montenegro (1999)

My work in Montenegro stands out as one of my proudest achievements. In 1999, I was appointed as a state counselor, with a cabinet-level rank, to President Milo Đukanović. At the time, Yugoslavia’s economy was collapsing, and Montenegro needed to chart its own path. I proposed and helped execute what some have called Montenegro’s “dollarization,” though we used the German deutsche mark, and later the euro. This decision effectively separated Montenegro from the Yugoslav dinar. It was not without risk—Belgrade was outraged, and I even had bodyguards and received threats from Slobodan Milošević’s regime. But the transition was smooth and highly successful. Montenegro avoided the crippling inflation that plagued the rest of Yugoslavia. As I often say, the operation “worked perfectly, as all dollarizations around the world had before,” contrary to what many skeptics claimed at the time.

Ecuador (2000)

Although Ecuador’s decision to dollarize was homegrown, I played a role as an external advocate and later as an advisor. In 2000, facing a devastating banking crisis and inflation spiral, Ecuador adopted the U.S. dollar. I visited the country to offer technical input and strategic guidance. Since dollarizing, Ecuador has experienced its longest period of monetary stability in history. Inflation fell from double digits to consistently low single digits. Despite political instability, defaults, and global economic shocks, Ecuador’s monetary regime has held strong. One metric I often cite is the misery index: before dollarization, it hovered above 120. Afterward, it dropped to around 20. As I like to say, “the proof of the pudding is in the eating.” More than two decades later, Ecuadorians still overwhelmingly support dollarization, because it safeguarded their purchasing power and ended the chaos. I’ve written extensively defending Ecuador’s dollarization and continue to encourage the country to take the next logical step: permanently close the central bank. While that hasn’t happened yet, I remain convinced it’s the right move.

Key Countries at a Glance 🌍

Impact Scorecard 📈

Timeline of Dollarization Work

Here's a visual timeline of Steve Hanke's dollarization and currency stabilization work across different countries: