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Central Banking and the Choice of Currency Regime in Accession Countries

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  • Willem Buiter
  • Clemens Grafe

Abstract

[fre] Banque centrale et choix de régimes de change pour les pays candidats à l’adhésion . Cet article étudie les évolutions institutionnelles des Banques centrales ainsi que les régimes de change des pays de l’Est, candidats à l’UE. Nous examinons les régimes actuels et comment ils doivent évoluer afin des respecter les critères d’entrée dans l’UE et l’UEM. De plus, nous étudions avec quel degré les pays candidats satisfont les critères d’accession et nous les comparons aux performances des derniers entrants dans l’UE. Après avoir conclu que les critères d’accession ne favorisent pas nécessairement un régime de change particulier, nous analysons le pour et le contre des deux régimes envisagés comme les plus stables - le currency board et la cible d’inflation. Sous ces deux régimes, le respect des critères de faible inflation et de stabilité des changes est susceptible de produire de fortes tensions. . Classification JEL : E58, F31, P20 [eng] This paper deals with the design of appropriate Central Banking arrangements and exchange rate regimes for those CEECs that are candidates for full membership in the EU. We give an overview of the existing arrangements and point out to which extent monetary arrangements are restricted by conditions for entry both into the EU and into the EMU. Furthermore we investigate to which degree countries are fulfilling the accession criteria and compare their performance with the performance of earlier EU joiners. After concluding that the accession criteria do not necessarily favour a particular monetary regime, we analyse the pros and cons of the two regimes widely believed to be most stable-currency boards or inflation targeting. Under either regime tensions are likely to arise from the attempt to meet the accession criteria of a low inflation rate and a stable exchange rate. . JEL classifications : E58, F31, P20

Suggested Citation

  • Willem Buiter & Clemens Grafe, 2001. "Central Banking and the Choice of Currency Regime in Accession Countries," Revue d'Économie Financière, Programme National Persée, vol. 6(1), pages 287-318.
  • Handle: RePEc:prs:recofi:ecofi_1767-4603_2001_hos_6_1_4564
    Note: DOI:10.3406/ecofi.2001.4564
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    1. Willem H. Buiter & Clemens Grafe, 2002. "Anchor, float or abandon ship: exchange rate regimes for the accession countries," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 55(221), pages 111-142.
    2. Edgar Feige & James Dean, 2002. "Dollarization and Euroization in Transition Countries: Currency Substitution, Asset Substitution, Network Externalities and Irreversibility," International Finance 0205003, EconWPA.
    3. Buiter, Willem H. & Grafe, Clemens, 2002. "Patching up the Pact: some Suggestions for Enhancing Fiscal Sustainability and Macroeconomic Stability in an Enlarged European Union," CEPR Discussion Papers 3496, C.E.P.R. Discussion Papers.
    4. Michael Artis & Massimiliano Marcellino & Tommaso Proietti, 2004. "Characterising the Business Cycle for Accession Countries," Working Papers 261, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    5. Helmut Wagner, 2002. "Implications of Globalization for Monetary Policy," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    6. Thomas Dalsgaard & Jørgen Elmeskov & Cyn-Young Park, 2002. "Ongoing changes in the business cycle - evidence and causes," SUERF Studies, SUERF - The European Money and Finance Forum, number 20 edited by Morten Balling.
    7. repec:spo:wpecon:info:hdl:2441/3361 is not listed on IDEAS
    8. Bert Scholtens & Dick van Wensveen, 2003. "The Theory of Financial Intermediation: An Essay On What It Does (Not) Explain," SUERF Studies, SUERF - The European Money and Finance Forum, number 2003/1 edited by Morten Balling.
    9. Jean-Paul Abraham & Peter Van Dijcke, 2002. "European Financial Cross-Border Consolidation: At the crossroads in Europe? By exception, evolution or revolution?," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    10. Luiz Fernando de Paula, 2002. "Banking Internationalisation and the Expansion Strategies of European Banks to Brazil during the 1990s," SUERF Studies, SUERF - The European Money and Finance Forum, number 18 edited by Morten Balling.
    11. Christian Harm, 2002. "Bank management between shareholders and regulators," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    12. Eduard Hochreiter, 2001. "Exchange Rate Policy in the Run-up to EMU - The Austrian Experience," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(2), pages 19-23, October.
    13. Sandrine Levasseur, 2004. "Why not euroisation?," Revue de l'OFCE, Presses de Sciences-Po, vol. 91(5), pages 121-156.
    14. Mart Sırg, 2005. "Estoniaís Accession to the EMU," Working Papers 133, Tallinn School of Economics and Business Administration, Tallinn University of Technology.
    15. Willem H. Buiter & Clemens Grafe, 2002. "Ancorare, fluttuare o abbandonare la nave:i regimi valutari dei paesi candidati all' Unione Europea," Moneta e Credito, Economia civile, vol. 55(218), pages 127-164.
    16. Juan Sergio Lopez & Alessandra Appennini & Stefania P. S. Rossi, 2002. "Are Italian mutual banks efficient? Evidence from two different cost frontier techniques," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    17. Raoul Lättemäe, 2003. "EMU Accession Issues in Baltic Countries," Eastward Enlargement of the Euro-zone Working Papers wp17a, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 May 2003.
    18. Andreas Grünbichler & Patrick Darlap & Sinikka Salo & Leslie Lipschitz & Timothy Lane & Alex Mourmouras, 2004. "Supervisory Systems, Fiscal Soundness and International Capital Movement: More Challenges for new EU Members," SUERF Studies, SUERF - The European Money and Finance Forum, number 2004/1 edited by Morten Balling.
    19. Paula Bongini, 2003. "The EU Experience in Financial Services Liberalization: A Model for GATS Negotiations?," SUERF Studies, SUERF - The European Money and Finance Forum, number 2003/2 edited by Morten Balling.
    20. Roberto Di Salvo & Maria Carmela Mazzilis & Andrea Guidi, 2002. "Mergers and Acquisitions Between Mutual Banks in Italy :An analysis of the effects on performance and productive efficiency," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    21. Jarko Fidrmuc, 2004. "The Endogeneity of the Optimum Currency Area Criteria, Intra-industry Trade, and EMU Enlargement," Contemporary Economic Policy, Western Economic Association International, vol. 22(1), pages 1-12, January.
    22. Fidrmuc, Jarko, 2001. "The endogeneity of optimum currency area criteria, intraindustry trade and EMU enlargement," BOFIT Discussion Papers 8/2001, Bank of Finland, Institute for Economies in Transition.
    23. Clement van de Coevering, 2003. "Structural convergence and monetary integration in Europe," MEB Series (discontinued) 2003-20, Netherlands Central Bank, Monetary and Economic Policy Department.
    24. Emilian Dobrescu, 2015. "Comparative Price Level (Cpl) – A Representative Parameter of Economic Convergence," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 7-28, December.

    More about this item

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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