Hard peg and monetary unions.Main lessons from the Argentine experience
AbstractCurrency board (CB) was a corner solution for Argentine hyperinflation, however its balance is controversial. How does a CB work as a long run regime? After evaluating the result of ten years CB regime, we obtain important lessons for a monetary union and for dollarization proposals. We discuss: 1) the capacity of such a regime to deal with real and nominal volatility, 2) fiscal problems and debt dynamics, 3) financial problems under currency substitution, 4) CB regime compared with dollarization and 5) the feasibility of a single–peg CB in a flexible exchange rate world.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 7843.
Date of creation: 2004
Date of revision: 2007
Currency board; Dollarization; Monetary union; Fiscal policy and Monetary policy;
Find related papers by JEL classification:
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-25 (All new papers)
- NEP-CBA-2008-03-25 (Central Banking)
- NEP-MON-2008-03-25 (Monetary Economics)
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