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A Payments Mechanism for the Former Soviet Union: Is the EPU a Relevant Precedent?

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  • Eichengreen, Barry

Abstract

Since the collapse of the Soviet Union, the trade of its successor states has spiralled downward. The European Payments Union of the 1950s is frequently invoked as a model for solving this problem. In this paper I show that in fact the EPU is an inappropriate framework for organizing the former Soviet Union's trade and payments. The only multilateral clearing union that is feasible prior to stabilization is one based on continuous multilateral balance among the participating countries. Such an arrangement is identical in its essentials to current account convertibility. In effect, then, the only choices available to the former Soviet Union prior to stabilization are bilateralism and convertibility. I make the case for convertibility and against current proposals for an Interstate Bank.

Suggested Citation

  • Eichengreen, Barry, 1993. "A Payments Mechanism for the Former Soviet Union: Is the EPU a Relevant Precedent?," CEPR Discussion Papers 824, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:824
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    Citations

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    Cited by:

    1. Barry Eichengreen., 1993. "International Monetary Arrangements for the 21st Century," Center for International and Development Economics Research (CIDER) Working Papers C93-021, University of California at Berkeley.
    2. Barry Eichengreen., 1994. "History and Reform of the International Monetary System," Center for International and Development Economics Research (CIDER) Working Papers C94-041, University of California at Berkeley.
    3. Valeriya Dinger & Sven Steinkamp & Frank Westermann, 2014. "The Tragedy of the Commons and Inflation Bias in the Euro Area," Open Economies Review, Springer, vol. 25(1), pages 71-91, February.
    4. Groshek, Gerald, 1997. "The Czech and Slovak Clearing Agreement: a post-mortem," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 7(2), pages 171-184, July.
    5. Schoors, Koen, 2003. "The effect of Soviet monetary disintegration on the collapse of trade between members of the Commonwealth of Independent States," Economic Systems, Elsevier, vol. 27(1), pages 1-26, March.

    More about this item

    Keywords

    Former Soviet Union; Payments; Trade;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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