The stability of currency boards

The stability of currency boards

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...

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Detalles Bibliográficos
Otros Autores: Stukenbrock, Kai, author (author)
Formato: Libro electrónico
Idioma:Inglés
Publicado: Bern Peter Lang International Academic Publishing Group 2018
Frankfurt am Main, Germany: [2004]
Frankfurt am Main, Germany: [2018]
Edición:1st ed
Colección:CeGE-Schriften, 8.
Materias:
Currency boards > Case studies.
Argentina
Boards
Currency
Currency Board
Currency Crisis
Estonia
Exchange Rate
Foreign-Currency Debt
Hong Kong
Lithuania
Stabilitätspolitik
Stability
Stukenbrock
Ver en Biblioteca Universitat Ramon Llull:https://discovery.url.edu/permalink/34CSUC_URL/1im36ta/alma991009422491906719
Tabla de Contenidos:
  • Cover
  • List of Figures
  • List of Tables
  • List of Abbreviations
  • List of Variables
  • 1 Introduction
  • 2 Currency Boards-An Overview
  • 2.1 Basic Features of a Currency Board
  • 2.1.1 Definition of a Currency Board
  • 2.1.2 Currency Boards vs Central Banks
  • 2.1.3 Flexibility in Design
  • 2.2 Currency Board Characteristics
  • 2.2.1 Credibility and Macroeconomic Stability
  • 2.2.2 The Adjustment Process and Market Flexibility
  • 2.2.3 Anchor Currency Selection-A Theory of Optimum Currency Areas Perspective
  • 2.2.4 Monetary Policy, Lender of Last Resort Support, and Financial Fragility
  • 2.2.5 Fiscal Policy
  • 2.3 Conclusion
  • 3 Past and Present Currency Boards
  • 3.1 History of Currency Boards
  • 3.1.1 General Overview
  • 3.1.2 Foundations
  • 3.1.3 The First Currency Boards (1849-1912)
  • 3.1.4 The West African Currency Board (1913)
  • 3.1.5 The Peak and Decline of the Currency Board System (1913-1974)
  • 3.2 Hong Kong (1983)
  • 3.2.1 Lead-Up to the Currency Board
  • 3.2.2 Currency Board Design
  • 3.2.3 Currency Board Performance
  • 3.3 Argentina (1991-2002)
  • 3.3.1 Lead-Up to the Currency Board
  • 3.3.2 Currency Board Design
  • 3.3.3 The Early Years of the Currency Board and the Tequila Crisis
  • 3.3.4 The Late Years and Currency Board Exit
  • 3.4 Estonia (1992) and Lithuania (1994)
  • 3.4.1 Lead-Up to the Currency Boards
  • 3.4.2 Currency Boards Design
  • 3.4.3 Currency Boards Performance
  • 3.4.4 Accession to the European Union and the European Monetary Union
  • 3.5 Bulgaria (1997)
  • 3.5.1 Lead-Up to the Currency Board
  • 3.5.2 Currency Board Design
  • 3.5.3 Currency Board Performance
  • 3.6 Summary
  • 4 Stability and Instability of Currency Boards-a Theoretical Analysis
  • 4.1 Models of Currency Crises
  • 4.1.1 First and Second Generation Currency Crises Models
  • 4.1.2 Critique of Second Generation Crises Models.
  • 4.1.3 Classification of the Currency Board Crises Model
  • 4.2 The Standard Model
  • 4.2.1 Model Outline
  • 4.2.2 Discretionary Exchange Rate Policy
  • 4.2.3 Fixed Exchange Rate and Time-Inconsistency
  • 4.2.4 Political Cost of Devaluation and Incomplete Information
  • 4.2.5 Possible Equilibria
  • 4.2.5.1 FC equilibrium
  • 4.2.5.2 ZC equilibrium
  • 4.2.5.3 PC equilibria
  • 4.2.5.4 Graphical Representation and Multiple Equilibria
  • 4.2.5.5 Model Parameters and Types of Equilibria
  • 4.2.6 Inter-temporal Linkages and Dynamic Effects
  • 4.2.7 Stability of the Currency Board
  • 4.2.7.1 Gains from Increased Credibility
  • 4.2.7.2 Destabilization through Unemployment
  • 4.2.7.3 Destabilization through a Sequence of PC Equilibria
  • 4.2.7.4 Employment-Decreasing Shocks
  • 4.2.7.5 Conclusion
  • 4.2.8 Loss from Exit
  • 4.3 The Model with Debt
  • 4.3.1 Possible Effects of Foreign-Currency Debt on the Model Economy
  • 4.3.2 Unemployment
  • 4.3.3 Discretionary and Fixed Exchange Rate Policy
  • 4.3.4 Model Equilibria
  • 4.3.5 Graphical Representation and Interpretation of the Modified Model
  • 4.3.6 Model Dynamics and Resilience to Shocks
  • 4.3.7 Loss from Exit and Conclusion
  • 5 Conclusion
  • 5.1 Currency Board Selection
  • 5.2 Currency Board Stability
  • 5.3 The Risks
  • 5.4 Outlook
  • Appendices
  • A Currency Boards 1849-2002 Overview
  • B Currency Board Design Features
  • C Derivation of Equations
  • C.1 The Standard Model
  • C.1.1 Derivation of Devaluation and Loss Equations (4.6) and (4.7)
  • C.1.2 Proof that (4.9) Greater than (4.11)
  • C.1.3 Difference Loss Fixed and Loss Discretionary Exchange Rate
  • C.1.4 Derivation of Equation (4.19), Expected Devaluation
  • C.1.5 Derivation of Unemployment Equation (4.24)
  • C.1.6 Derivation of Unemployment Equation (4.28)
  • C.1.7 Derivation of critical value for c (4.30).

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