Can /etc/hosts be used with proxy_pass instead of resolver?

I need to perform a loopback to the same nginx machine. Is there a way to resolve the domains using the machine's /etc/hosts file instead of specifying a DNS server?

Thanks for any advice you could share..

Posted an answer at http://stackoverflow.com/questions/8305015/when-using-proxy-pass-can-etc-hosts-be-used-to-resolve-domain-names-instead-of/8559797#8559797