-PDF Download- Currency Boards EBOOK

Currency Boards

Author: Mr.Atish R. Ghosh

Publisher: International Monetary Fund

Published: 1998-01-01

Total Pages: 23

ISBN-13: 1451927959

The growing integration of world capital markets has made it fashionable to argue that only extreme exchange rate regimes are sustainable. Short of adopting a common currency, currency board arrangements represent the most extreme form of exchange rate peg. This paper compares the macroeconomic performance of countries with currency boards to those with other forms of pegged exchange rate regime. Currency boards are indeed associated with better inflation performance, even allowing for potential endogeneity of the choice of regime. Perhaps more surprisingly, this better inflation performance is accompanied by higher output growth.

Currency Boards - How a Currency Board Works

Author: Raffaele Nostitz

Publisher: GRIN Verlag

Published: 2009-05

Total Pages: 29

ISBN-13: 3640334965

DOWNLOAD EBOOK →

Essay from the year 2009 in the subject Economics - Monetary theory and policy, grade: 2,3, Free University of Berlin, course: International Monetary Relations, language: English, abstract: "Stability might not be everything, but without stability everything is nothing." This quote of the former federal minister for economics and finance in Germany leads directly to the reason for the installation of a currency board. Stability of the monetary system means the achievement of three objectives: a fixed exchange rate system to alleviate the calculations for international trade, free capital movement to ensure the convertibility of currencies, and a monetary policy that can address independently domestic concerns like inflation or unemployment. Unfortunately, it is impossible to achieve all three objectives at the same time. This goal conflict is often called "triangle of impossibility" or "impossible trinity" in the international economics literature. If a country's decision is to fix the exchange rate to a selected currency, a currency board would be one of the possible instruments. In this essay, first there will be taken a short look at how a currency board works and what the political meanings and consequences are. Afterwards, a short analysis of the currency board-like system that has been installed in Argentina from 1991 to 2002 leads to the drawbacks and opportunities of currency boards.

Currency Boards and External Shocks

Author: Guillermo Perry

Publisher: World Bank Publications

Published: 1997-01-01

Total Pages: 38

ISBN-13: 9780821338643

DOWNLOAD EBOOK →

Currency boards are institutions that replace central banks and ensure that a country's currency can be purchased at a given price (or exchange rate) upon demand, thus imposing a fixed exchange rate on international transactions. These systems have their advantages--they prohibit the use of liberal monetary policies that lead to high inflation--but they can also limit the ability of an economy to react to changes in international economic conditions if foreign currency reserves are depleted. Such threats to the stability of the financial sector may stem from economic events that originate outside the national economy (external shocks), such as the fallout from the Mexican peso devaluation in late 1994. This paper presents the proceedings of a World Bank roundtable discussion held in 1996 to examine the impact of external shocks and to address the challenges countries face when operating under a currency-board system of currency exchange, with a particular emphasis on how certain costs can be minimized while maximizing the gains. Special attention is given to the currency-board systems in Argentina and Hong Kong.

The Stability of Currency Boards

Author: Kai Stukenbrock

Publisher: Peter Lang Pub Incorporated

Published: 2004

Total Pages: 237

ISBN-13: 9783631520314

DOWNLOAD EBOOK →

The 1990s saw a revival of the currency board system, and proponents have advocated it as an easy-to-set-up exchange rate arrangement providing effective stabilization of the economy. However, the experience of Argentina has highlighted the risks of having a currency board. This study presents both the potential benefits, as well as the risks, of having a currency board by examining the stability of the currency board arrangement and identifying factors affecting the stability. The analysis is based on second-generation currency crisis models, extended to incorporate currency-board specific features and to account for particular aspects often found in currency-board economies.

What Role for Currency Boards?

Author: John Williamson

Publisher: Peterson Institute for International Economics

Published: 1995

Total Pages: 90

ISBN-13:

DOWNLOAD EBOOK →

Explains what a currency board is and how it differs from a central bank. Examines the advantages and disadvantages of each type of arrangement.

Proceedings of a Conference on Currency Substitution and Currency Boards

Author: Nissan Liviatan

Publisher: World Bank Publications

Published: 1993-01-01

Total Pages: 132

ISBN-13: 9780821325216

DOWNLOAD EBOOK →

Eighteen well-known policymakers and economists discuss the rising use of currency substitution in Latin America. They examine the effects of currency boards on substitute currencies and on national stabilization programs. Latin American countries including Argentina, Bolivia, Peru, and Uruguay increasingly use dollars as a substitute for domestic currency. The experts debate whether the region should encourage or resist this trend. Topics include the effects of substitution on inflation, liquidity, and exchange rates. The discussions on Argentina, Peru, and Brazil focus on the ways in which currency boards have affected stabilization in these countries. They consider whether such boards can strengthen fiscal discipline and speed economic adjustment. A currency board issues money that is converted into a foreign reserve currency at a fixed exchange rate. This independent institution takes over the central bank's role as the sole issuer of base money. It also manages the exchange rate to keep the currency stable and convertible.

Currency Boards in Retrospect and Prospect

Author: Holger C. Wolf

Publisher: MIT Press

Published: 2008

Total Pages: 279

ISBN-13: 0262232650

DOWNLOAD EBOOK →

Employing economic theory, cross-country empirical comparison and case studies, this work analyses the effect of currency boards on inflation, output growth and macroeconomic performance. The case studies come from Argentina, Estonia Lithuania, Bulgaria and Bosnia and Herzegovina.

Currency Boards

Author: Adam Bennett

Publisher: International Monetary Fund

Published: 1994-09

Total Pages: 38

ISBN-13:

DOWNLOAD EBOOK →

This paper discusses some of the issues that concern the operation of currency boards, by comparison to conventional exchange rate pegs, and looks at the experiences of three examples of this type of arrangement: Argentina (from 1991), Hong Kong (from 1983) and Estonia (from 1992). In all three cases, the implementation of currency boards or equivalent arrangements played a significant role in their successful stabilization programs. Currency boards derive their strength from the fact that they severely constrain the policy maker’s room for manoeuvre, by comparison to conventional pegs. They generally require an even stricter and less forgiving attitude to bank failure, wage and price rigidities and other disturbances than do exchange rate pegs in general. This is a Paper on Policy Analysis and Assessment and the author(s) would welcome any comments on the present text. Citations should refer to a Paper on Policy Analysis and Assessment of the international Monetary Fund mentioning the author(s) and the date of issuance. The views expressed are those of the author(s) and do not necessarily represent those of the Fund.

Hyperinflation, Currency Board, and Bust

Author: Jutta Maute

Publisher: Peter Lang Publishing

Published: 2006

Total Pages: 296

ISBN-13:

DOWNLOAD EBOOK →

Originally presented as the author's thesis (doctoral)--Universiteat Hohenheim, 2006.

Russian Currency and Finance

Author: Steve H. Hanke

Publisher: Routledge

Published: 2005-08-18

Total Pages: 260

ISBN-13: 1134863691

DOWNLOAD EBOOK →

As the new Russian state struggles with the transition to a market economy, the need for radical monetary reform becomes increasingly urgent. The choice of reform is crucial, for it will largely determine Russia's future economic performance. In order to break free of the lingering effects of Soviet central planning, the new Russian state needs a stable, convertible currency. Steve H. Hanke, Lars Jonung and Kurt Schuler propose that Russia establishes a currency board which would issue a Russian currency fully convertible with international currency, backed 100 per cent by international bonds. The international community would aid in establishing the currency board by providing the initial reserves. Early supplies of this new Russian currency would be distributed free to Russian citizens. The authors give detailed explanations of how the currency board could be established and how it would work.