Pizza Patrón, a Dallas-based pizza chain with many Latino customers,
has begun accepting pesos as payment, hitting a nerve in the nationwide
immigration debate. Critics call the idea unpatriotic.
I see five readings:
1. This is testament to the remarkable new-found stability of the Mexican peso. Immigrant arrivals still hold pesos rather than ditching them ASAP.
2. People could have free banking or competing currencies already, if they wanted it.
3. The pizza chain is receiving lots of positive publicity with its Latino customers. I saw this same item on Primer Impacto last week.
4. If everyone accepted pesos, currency substitution effects would make the demand for dollars harder to predict, and thus monetary policy would be harder to implement. Inflation would accelerate the velocity of monetary circulation to a greater degree, if dollar inflation is high just switch from dollars to pesos.
5. Change is given at the rate of twelve pesos to the dollar, so this is price discrimination against patriotic and possibly unsavvy Mexican customers.