Download or read book The Stability of Currency Boards written by Kai Stukenbrock and published by Peter Lang Pub Incorporated. This book was released on 2004 with total page 237 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Currency Boards How a Currency Board Works written by Raffaele Nostitz and published by GRIN Verlag. This book was released on 2009-05 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Currency Boards written by Adam Bennett and published by International Monetary Fund. This book was released on 1994-09 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Dual Currency Boards written by Mr.S. E. Oppers and published by INTERNATIONAL MONETARY FUND. This book was released on 2000-12-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that extending the convertibility guarantee of the traditional currency board to a second reserve currency brings about an automatic, market-driven change of the peg when the initial reserve currency appreciates beyond a specified level. The “dual” currency board thus maintains the advantages of a hard peg, but avoids the economic difficulties associated with the link to an overvalued reserve currency. As an added benefit, the system has the potential to promote global currency stability, with the reserves of the dual currency board country acting as a buffer stock to the exchange cross-rate of the chosen reserve currencies.
Download or read book Currency Boards and External Shocks written by Guillermo Perry and published by World Bank Publications. This book was released on 1997-01-01 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Hyperinflation Currency Board and Bust written by Jutta Maute and published by Peter Lang Publishing. This book was released on 2006 with total page 296 pages. Available in PDF, EPUB and Kindle. Book excerpt: Originally presented as the author's thesis (doctoral)--Universiteat Hohenheim, 2006.
Download or read book Dual Currency Boards written by Stefan Erik Oppers and published by . This book was released on 2000 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: The International Monetary Fund (IMF) presents the full text of the December 2000 working paper entitled "Dual Currency Boards: A Proposal for Currency Stability," prepared by Stefan Erik Oppers. The text is available in PDF format. This paper argues that extending the convertibility guarantee of the traditional currency board to a second reserve currency brings about an automatic change when the initial reserve currency appreciates beyond a specific level.
Download or read book Straining at the Anchor written by Gerardo della Paolera and published by University of Chicago Press. This book was released on 2007-12-01 with total page 296 pages. Available in PDF, EPUB and Kindle. Book excerpt: The "Argentine disappointment"—why Argentina persistently failed to achieve sustained economic stability during the twentieth century—is an issue that has mystified scholars for decades. In Straining the Anchor, Gerardo della Paolera and Alan M. Taylor provide many of the missing links that help explain this important historical episode. Written chronologically, this book follows the various fluctuations of the Argentine economy from its postrevolutionary volatility to a period of unprecedented prosperity to a dramatic decline from which the country has never fully recovered. The authors examine in depth the solutions that Argentina has tried to implement such as the Caja de Conversión, the nation's first currency board which favored a strict gold-standard monetary regime, the forerunner of the convertibility plan the nation has recently adopted. With many countries now using—or seriously contemplating—monetary arrangements similar to Argentina's, this important and persuasive study maps out one of history's most interesting monetary experiments to show what works and what doesn't.
Download or read book Hong Kong s Money written by Tony Latter and published by Hong Kong University Press. This book was released on 2007-08-01 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since 1983 Hong Kong has pegged its currency to the US dollar through a currency board system that is unique among the world's advanced economies. In this first comprehensive book about Hong Kong's monetary system, Tony Latter draws on his considerable experience in central banking generally, and with the Hong Kong Monetary Authority in particular, to give a detailed account of how the system operates; why it was introduced; what are the important differences from other monetary regimes; and how it has performed. After a brief overview of Hong Kong's currency board system, two chapters explain the key features of mainstream monetary policy as practised in most economies and how the currency board differs. Then three chapters deal with the history of money in Hong Kong from the mid-1930s, describing the salient events and changes of the period up to the 1983 crisis and the consequent re-adoption of the currency board. Descriptions of the functioning of the system after 1983 and its evolution to the present day then follow. The book concludes with assessments of the performance of the currency board since 1983 and of the Hong Kong economy more widely. This book is designed both to inform lay readers and to provide substance for monetary economists. Given the key role of monetary policy in providing a stable foundation for a strong economy, the book is of importance for all business people in Hong Kong, while the more analytical sections provide essential reading for all students of economics.
Download or read book Currency Stability and a Country s Prosperity written by John E. Baiden and published by Xlibris Corporation. This book was released on 2021-02-10 with total page 408 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is based upon the author’s study, and thesis submitted at Thomas Jefferson School of law. The intent of the study or research was to test or verify the author’s hypothesis, thus “unstable currencies equals an unstable country” by understudying currencies in top ten countries and bottom ten countries ranked in the 2016 World Prosperity Index and Fragile States Index 2016; to determine whether there is a co-relationship between stable or unstable currencies and a country’s prosperity or failure/ misery. ‘The Value of Offshore Banking to the Global Financial System’; ‘Inflation Targeting, why the value of money matters to you’, and ‘Exchange Traded Funds’ are the author’s previous books. Thanks for your patronage.
Download or read book Pros and Cons of Currency Board Arrangements in the Lead Up to EU Accession and Participation in the Euro Zone written by Ms.Anne Marie Gulde and published by International Monetary Fund. This book was released on 2000-02-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Historically, countries with currency board arrangements (CBAs) have experienced lower inflation and higher growth than those with other regimes. The experiences of three candidates for EU membership with CBAs (Estonia, Lithuania, and Bulgaria) have also been generally favorable. Can CBAs serve these transition countries well all the way up to the adoption of the euro? After considering the pros and cons, this paper provides an affirmative answer, but notes that to preserve the viability of their CBAs throughout the process, these countries need to maintain strict policy discipline and be prepared to deal with large capital inflows and asymmetric shocks.
Download or read book Fiscal Discipline and Stability Under Currency Board Systems written by Oliver Grimm and published by . This book was released on 2007 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Lithuania written by International Monetary Fund and published by International Monetary Fund. This book was released on 2002-08-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper examines the evolution of the institutional setup of Lithuania's Currency Board Arrangement (CBA) and competitiveness from 1994 through 2001, with a view to determining the resilience of the Lithuanian CBA to external shocks in 2002-03. First, several indicators of competitiveness are analyzed in the context of productivity gains and flexibility of the labor market and prices are considered. Then, the equilibrium exchange rate and misalignments of the actual rate from it are estimated in a cointegration framework. The paper concludes that, under current policies, the CBA would be able to cope with sizable external shocks during 2002-03 provided supporting policies remain in place.
Download or read book Discretion with Rules written by Wayne Camard and published by . This book was released on 1996 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Currency Boards Credibility and Macroeconomic Behavior written by Mr.Amadou N. R. Sy and published by INTERNATIONAL MONETARY FUND. This book was released on 2000-06-01 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Currency boards operate differently from standard pegs. The former exhibit greater currency stability and lower transaction costs, inflation, and nominal interest rates, but are limited in their use of devaluation. We extend Drazen and Masson’s (1994) signaling model to consider the choice between currency board arrangements and standard pegs. The model shows that currency boards’ effectiveness hinges on their credibility properties and that they can improve welfare even with high unemployment persistence. By reducing expected inflation and the negative employment effect arising from expected but unrealized inflation, currency boards can produce less unemployment than peg regimes that abstain from devaluation.
Download or read book Crs Report for Congress written by Marc Labonte and published by BiblioGov. This book was released on 2013-10 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Foreign Operations Act (P.L. 102-391) signed on October 6, 1992 allows the U.S. quota, or contribution, increase to the IMF of $12 billion to be used to ..".support monetary stability in member countries through the instrumentality of currency boards." What is a currency board? How does it differ from an alternative monetary arrangement such as a central bank? Why was it adopted by countries with histories of chronic inflation (e.g., Argentina) and those emerging from the Soviet bloc (e.g., Bulgaria), and urged upon those suddenly hit by currency speculation (e.g., Indonesia)? What role did the currency board play in Argentina's 2001-2003 financial difficulties and why was it abandoned? Although factors affecting the decision to adopt a currency board vary from country to country, as do outcomes, fundamental differences between currency boards and central banks remain constant. This report focuses on their differences to provide a foundation for evaluating disparate cases. To understand the differences, it should be noted that the most important function of a central bank is its ability to alter the supply of money. When this power is abused, as occurs when central banks must provide the monetary wherewithal to finance government budget deficits, it undermines the ...
Download or read book Currency Boards for Developing Nations written by Stephanie Shwiff and published by . This book was released on 2004 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt:
