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Policy Pre-Commitment and Institutional Design: A Synthetic Indicator Applied to Currency Boards

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  • Marie-Thérèse Camilleri Gilson
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    Currency boards have been portrayed as an extreme way of creating currency quality and improving monetary policy credibility in emerging market economies. Yet the link between currency board operations and credibility is far from obvious. Indeed, under the heading of currency boards, there is in fact a number of significantly diverse institutional arrangements. Furthermore, currency boards can only be viewed as part of a wider policy framework encompassing fiscal sustainability and flexibility in the real economy. Along these lines, this paper describes as precisely as possible what constitutes, in theory, a currency board. It highlights the specificities of money multiplier and balance sheet issues in currency board frameworks. The paper offers an in-depth review of the actual institutional arrangements underlying existing currency boards in Eastern Europe and Asia (as well as that of Argentina until 2001) and derives a synthetic indicator of institutional pre-commitment. The ... Engagement statutaire et définition institutionnelle : Un indicateur synthétique appliqué aux cas des caisses d'émission Les caisses d’émission (currency boards) ont souvent été décrites comme un moyen extrême de créer la qualité d’une monnaie et d’améliorer la crédibilité de la politique monétaire dans les marchés émergents. Néanmoins, le lien entre crédibilité et caisses d’émission est loin d’être évident. En effet, sous la dénomination de caisse d’émission il y a beaucoup d’arrangements institutionnels très différents. En outre, les caisses d’émission doivent être vues dans le contexte d’un cadre de politique économique englobant la soutenabilité de la politique budgétaire et la flexibilité dans l’économie réelle. Cette étude décrit de façon aussi précise que possible ce qui constitue théoriquement une caisse d’émission. Elle souligne les spécificités des multiplicateurs monétaires et la structure de bilans des intermédiaires financiers sous le régime d’une caisse d’émission. L’étude offre une revue détaillée des arrangements institutionnels sousjacents aux caisses d’émission en vigueur en Europe de l’Est et en Asie (aussi bien que celui de l’Argentine jusqu’à fin-2001) ; un indicateur synthétique du degré d’engagement institutionnel est proposé. L’étude conclut avec une discussion sur le dilemme entre flexibilité et crédibilité, ainsi que les questions liées à une sortie éventuelle de la caisse d’émission.

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    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 330.

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    Date of creation: 23 May 2002
    Handle: RePEc:oec:ecoaaa:330-en
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