The Money Supply in Currency Boards

Nicholas Krus
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Nicholas Krus: The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise

No 3, Studies in Applied Economics from The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise

Abstract: How does a currency board obtain monetary equilibrium? This paper provides an in-depth analysis of the money supply in currency boards in order to review their monetary stability. After many years of neglect by economists and policymakers, currency boards enjoyed a revival in the 1990s. Although no new currency boards have been established since 1997, economists continue to consider them from time to time as a possibility for monetary reform in some countries. This paper hypothesizes that there are certain circumstances under which a currency board maintains monetary equilibrium while an unorthodox currency board may not. By taking a balance sheet model approach, one can make more definitive conclusions about the workings and efficacy of various currency boards.

Pages: 32 pages
Date: 2012-11
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:jhisae:0003

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