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The Danish problem

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  • Barry Eichengreen

    (University of California, Berkeley)

Abstract

Specialists in international finance have long been impressed by the fragility of currency pegs. Yet the National Bank of Denmark has been able to maintain the krone’s peg to the euro since the euro came into existence in 1999, and the krone’s peg to the Deutschmark and SDR for 17 years before that. This paper considers a series of hypotheses that may help to account for the exceptional nature of this case. None of these explanations is entirely satisfactory, but collectively they go some way toward explaining the Danish exception.

Suggested Citation

  • Barry Eichengreen, 2023. "The Danish problem," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(3), pages 781-794, October.
    • Handle: RePEc:spr:epolit:v:40:y:2023:i:3:d:10.1007_s40888-023-00313-y
    DOI: 10.1007/s40888-023-00313-y
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    References listed on IDEAS

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    More about this item

    Keywords

    Exchange rates; Currency peg;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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