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Comparing the Institutional and Organizational Design of Currency Boards in Transition Countries


  • Nikolaynenovsky Kalinhristov
  • Mihail Mihaylov


The article carries out a comparative and descriptive analysis of the currency boards that have been introduced in three East European countries: Bulgaria, Estonia, and Lithuania. The initial conditions and specific features of currency boards in these three countries are presented in detail. There is also a focus on the institutional, organizational, legal, and political characteristics of these currency boards. Special attention is given to deviations from the orthodox currency board framework. Currency boards in the countries under consideration limit the scope for monetary policy, due to the presence of atypical balance sheet items and the employment of a number of monetary policy instruments. The comparison of currency board operation in the three countries reveals significant differences in the historical background of currency board adoption, institutional design, and overall macroeconomic framework. This observation does not fit completely with the generally accepted view that currency boards in the three transition economies function in a similar pattern and that the differences among them are insignificant. The article suggests some new directions for the analysis of currency boards in transition countries.

Suggested Citation

  • Nikolaynenovsky Kalinhristov & Mihail Mihaylov, 2002. "Comparing the Institutional and Organizational Design of Currency Boards in Transition Countries," Eastern European Economics, Taylor & Francis Journals, vol. 40(1), pages 6-35, January.
  • Handle: RePEc:mes:eaeuec:v:40:y:2002:i:1:p:6-35

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    References listed on IDEAS

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    9. Benassy-Quere, AgnEs & Fontagne, Lionel & LahrEche-Revil, Amina, 2001. "Exchange-Rate Strategies in the Competition for Attracting Foreign Direct Investment," Journal of the Japanese and International Economies, Elsevier, vol. 15(2), pages 178-198, June.
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    Cited by:

    1. M. Berlemann & Nikolay Nenovsky, 2003. "Lending of First Versus Lending of Last Resort: The Bulgarian Financial Crisis of 1996/1997," Post-Print halshs-00260241, HAL.
    2. Nikolay Nenovsky & Kalina Dimitrova, 2002. "Dual Inflation Under the Currency Board: The Challenges of Bulgarian EU Accession," William Davidson Institute Working Papers Series 487, William Davidson Institute at the University of Michigan.
    3. repec:clr:wugarc:y:2013:v:39i:1p:69 is not listed on IDEAS
    4. Alfred Sitz & Aneliya Adzhemova & Atanas Pekanov, 2013. "Bulgarien: wirtschaftspolitische Strategie und ökonomische Entwicklung seit der Öffnung," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 39(1), pages 69-85.
    5. Nikolay Nenovsky, 2010. "Monetary Regimes In Post-Communist Countries Some Long-Term Reflections," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 57, pages 217-234, november.
    6. Nikolay Nenovsky & Yorgos Rizopoulos, 2004. "Measuring the Institutional Change of the Monetary Regime in a Political Economy Perspective (Groups of interest and monetary variables during the Currency Board introduction in Bulgaria)," William Davidson Institute Working Papers Series wp732, William Davidson Institute at the University of Michigan.

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