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The currency board debate of the 1940s-1960s

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  • Parth THAKKAR

    (Independent Researcher)

Abstract

The late 1940s to the 1960s featured a sustained debate about currency boards in underdeveloped (or, in today’s parlance, developing) economies and their desirability compared to the alternative of central banking. Critics of currency boards found fault with them for the foregone cost of their “idle reserves,†their implied deflationary bias, their lack of discretionary monetary policy, and their lack of a lender of last resort, among other things. Defenders of the currency board system argued that the criticisms were either incorrect or irrelevant. After carefully reviewing the debate, I opine on it, coming down mainly on the side of the defenders of currency boards.

Suggested Citation

  • Parth THAKKAR, 2022. "The currency board debate of the 1940s-1960s," Journal of Economics Library, EconSciences Journals, vol. 9(2), pages 94-124, June.
    • Handle: RePEc:cvv:journ5:v:9:y:2022:i:2:p:94-124
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    References listed on IDEAS

    as
    1. D. C. Rowan, 1954. "The Origins Of The West African Currency Board," South African Journal of Economics, Economic Society of South Africa, vol. 22(4), pages 421-438, December.
    2. Malcolm Treadgold, 2005. "Colonial Currency Boards: The Seigniorage Issue," History of Economics Review, Taylor & Francis Journals, vol. 41(1), pages 126-141, January.
    3. John Williamson, 1995. "What Role of Currency Boards?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa40, October.
    4. H. A. Shannon, 1952. "The Modern Colonial Sterling Exchange Standard," IMF Staff Papers, Palgrave Macmillan, vol. 2(2), pages 318-362, April.
    5. Eugene A. Birnbaum, 1957. "The Cost of a Foreign Exchange Standard or of the Use of a Foreign Currency as the Circulating Medium," IMF Staff Papers, Palgrave Macmillan, vol. 5(3), pages 477-491, February.
    6. G. A. Blowers & A. N. McLeod, 1952. "Currency Unification in Libya," IMF Staff Papers, Palgrave Macmillan, vol. 2(3), pages 439-467, November.
    7. Schwartz, Anna J., 1993. "Currency boards: their past, present, and possible future role," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 147-187, December.
    8. H. A. Shannon, 1951. "Evolution of the Colonial Sterling Exchange Standard," IMF Staff Papers, Palgrave Macmillan, vol. 1(1), pages 334-354, January.
    9. Ida Greaves, 1954. "The Character of British Colonial Trade," Journal of Political Economy, University of Chicago Press, vol. 62(1), pages 1-1.
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    Keywords

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    JEL classification:

    • B27 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - International Trade and Finance
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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