<p style="text-align: justify;">This paper analyses the reasons why Ecuador changed its monetary policy by substituting the national currency Sucre by US Dollar; the benefits and costs of dollarization in Ecuador; examines economic performance by using data collected by the Central Bank and International database available, the period from 1996 to 2007 have been chosen for this study; and uses variables like GDP, Foreign Direct Investment, Debt, Taxes and Inflation.</p>