ABSTRACT
The introductory chapter lays the ground for the rest of the book by demonstrating the policy and academic relevance of the research and by presenting the structure of the book. The chapter takes the reader on a journey to the Georgian currency exchange shops and households who are indebted in foreign currency, and grounds the abstract phenomenon in everyday life in the context of a specific country. After introducing the key dimensions of dollarization and its implications for households, firms and the government, the chapter provides a brief historical overview of the phenomenon in Georgia (from the early 1990s) and sketches out its path of politicization along the currency crisis of 2015–2016. The Lari crisis of 2015 turned out to be a breaking point for recognizing long-lived dollarization as an issue, but it also led to a ‘looking for a scape goat’ discourse and blame games among the government, the central bank, and commercial banks. Having outlined the policy relevance of dollarization, the chapter turns to the critique of the current academic debate, which falls short of explaining the roots or the persistence of dollarization. Here a brief introduction of the political economic approach to dollarization of this book follows. The chapter concludes with a brief presentation of the rest of the chapters, the structure and aims of the book.
