Advanced Search
MyIDEAS: Login to save this article or follow this journal

Collective Pegging to an External Currency: Lessons from a Three-Country Model

Contents:

Author Info

  • Bangaké, Chrysost

    ()
    (Orleans University)

  • Desquilbet, Jean-Baptiste

    ()
    (Artois University)

Abstract

This paper examines the circumstances under which it is beneficial for small countries in a currency union to peg their currency to a large one (euro zone for example). For these purposes, we provide a three-country theoretical model extending the two-country model by Ricci (2008). The theoretical model is based on a Ricardian model of free traded, with specialised economies each producing one traded and one-traded good. We show that when the home country belongs to a monetary union and its exchange rate is anchored to the large country, the stability of its economy depends on the variability of real and monetary shocks for the large country. Furthermore, if the monetary rule in the currency union is higher than the average rate of growth of money supply of large country or if it is difficult to find a monerary rule in the currency union, it is advantageous to anchor the single currency to that of the large country.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.

Volume (Year): 25 (2010)
Issue (Month): ()
Pages: 550-570

as in new window
Handle: RePEc:ris:integr:0515

Contact details of provider:
Web page: http://econo.sejong.ac.kr/
More information through EDIRC

Related research

Keywords: Optimum Currency Area; Currency Union; Cost-Benefit Analysis; Collective Pegging; Small Countries; ECOWAS;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ris:integr:0515. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jong-Eun Lee).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.