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The Money Supply in Currency Boards

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  • Krus, Nicholas

    (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.

Suggested Citation

  • Krus, Nicholas, 2012. "The Money Supply in Currency Boards," Studies in Applied Economics 3, The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
    • Handle: RePEc:ris:jhisae:0003
    as

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    File URL: https://sites.krieger.jhu.edu/iae/files/2017/04/Working_Paper_Krus_Money_Supply_Currency_Boards.pdf
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    References listed on IDEAS

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    Cited by:

    1. Souleymane NDAO & Nikolay Nenovsky, 2020. "External Dependence of the African Franc CFA zone. Empirical Investigations on Money Supply Process," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 357-367, September.

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