Currency Boards in Retrospect and Prospect

by Wolf, Holger C.; Ghosh, Atish R.; Berger, Helge; Gulde, Anne-Marie

• ISBN13: 9780262232654
• ISBN10: 0262232650
• Format: Hardcover
• Copyright: 2008-04-30
• Publisher: Mit Pr

Summary

Currency boards, more so than other exchange rate regimes, have come in and out of fashion. Defined by a fixed exchange rate with full convertibility, central bank liabilities backed with foreign exchange reserves, and a high cost of exiting the regime, currency boards were common in colonial times-until most were cast off as countries gained independence after World War II. In the 1990s, currency boards enjoyed a revival as the cornerstone of various macroeconomic stabilization programs-including many in central and eastern European transition economies-only to fall into disfavor again with the collapse of the Argentine regime in 2002. The authors of Currency Boards in Retrospect and Prospecttake a balanced look at the effects of currency board regimes on inflation, output growth, and macroeconomic performance more generally. Drawing on historical experience, economic theory, cross-country empirical analysis, and case studies of currency boards in Argentina, Estonia, Lithuania, Bulgaria, and Bosnia and Herzegovina, the authors conclude that currency boards deliver significant reductions in inflation compared to other regimes and do not seem to result in slower growth or a markedly higher vulnerability to crisis.

Author Biography

Helge Berger is Professor and Chair of Monetary Economics at Free University Berlin.

Table of Contents

Series Foreword	p. ix
Preface	p. xi
Acknowledgments	p. xv
Introduction	p. 1
Currency Boards: History, Theory, and Institutions	p. 5
Currency Boards in Historical Perspective	p. 7
Why Do Countries Choose Currency Boards?	p. 25
Modern Currency Boards	p. 45
Structural and Institutional Aspects
Macroeconomic Performance	p. 59
Stylized Facts	p. 61
Inflation and Disinflation under Alternative Exchange Rate Regimes	p. 77
Output Growth and Trade Performance	p. 101
Argentina	p. 117
Case Studies in Modern Currency Boards	p. 145
The European Experience
Euro-Based Currency Boards: Introduction	p. 147
Estonia	p. 151
Lithuania	p. 161
Bulgaria	p. 173
Bosnia and Herzegovina	p. 183
Euro-Based Currency Boards: An Assessment	p. 191
Conclusions	p. 203
Institutional Characteristics of Modern Currency Boards	p. 207
Data Sources and Definitions	p. 215
Notes	p. 223
References	p. 239
Index	p. 253
Table of Contents provided by Publisher. All Rights Reserved.