IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Comparing Currency Board Automatic Mechanism in Bulgaria, Estonia and Lithuania

Listed author(s):
  • Nenovsky Nikolay

    (University of National and World Economy)

  • Hristov Kalin

    (University of National and World Economy)

  • Mihaylov Mihail

    (Bulgarian National Bank, Research Department)

The paper presents a cross-country analysis of the second generation of currency boards (CB) introduced in three East European countries: Bulgaria, Estonia and Lithuania. We focus on their institutional, legal and political characteristics which are closely associated with the operation of the automatic mechanism (AM) of currency boards. The presence of an automatic mechanism within the framework of the currency board is often cited as a major counterpoint to the discretion and subjectivity of a classical central bank. Since there is no precise definition of automatic mechanisms in the literature, we define it as: the presence of a positive cointegration relationship between the balance of payments and the reserve money (or money supply) and absence of discretionary variables in the model. When discretionary variables are present in the model in one form or another, we may speak of a mechanism for adjustment through discretion conscious or unconscious. Within the framework of the second generation of currency boards, we reduce the channel of discretion to the presence of atypical balance sheet items and employment of a number of monetary policy instruments. We seek in this article to compare currency board automatic mechanism in Bulgaria, Estonia and Lithuania.Larticle procède dune analyse transversale par pays de la deuxième génération des bureaux démission (currency boards) introduits dans trois pays de lEurope de lEst. Laccent est mis sur les caractéristiques institutionnelles, juridiques et politiques qui sont étroitement associées à lopération du mécanisme automatique (MA) des bureaux démission. Lexistence dun mécanisme automatique dans la structure dun bureau démission est souvent mise en avant comme largument majeur à lencontre de la discrétion et la subjectivité dune banque centrale classique. Parce quil nexiste aucune définition précise du mécanisme automatique dans la littérature, nous la définissons comme la présence dune relation positive de cointégration entre la balance des paiements et les réserves monétaires (ou loffre de monnaie) et labsence de variables discrétionna- ires dans le modèle. Quand des variables discrétionnaires sont présentes dans le modèle sous une forme ou une autre, nous pouvons parler dun mécanisme dajustement discrétionnaire conscient ou inconscient. Au sein de la structure de la deuxième génération des bureaux démission, la discrétion se réduit à la présence de postes atypiques dans le bilan et à lemploi dun certain nombre dinstruments de politique monétaire.Larticle propose une comparaison du mécanisme automatique en Bulgarie, Estonie et Lithuanie.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by De Gruyter in its journal Journal des Economistes et des Etudes Humaines.

Volume (Year): 11 (2001)
Issue (Month): 4 (December)
Pages: 1-44

in new window

Handle: RePEc:bpj:jeehcn:v:11:y:2001:i:4:n:2
Contact details of provider: Web page:

Order Information: Web:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. K. Hristov & Nikolay Nenovsky, 2001. "The Nonorthodox Currency Boards: The Case of Bulgaria," Post-Print halshs-00260074, HAL.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:bpj:jeehcn:v:11:y:2001:i:4:n:2. 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: (Peter Golla)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.