IDEAS home Printed from https://ideas.repec.org/p/ris/jhisae/0192.html
   My bibliography  Save this paper

The Currency Board Debate of the 1940s-1960s

Author

Listed:
  • Thakkar, Parth

    (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)

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

  • Thakkar, Parth, 2021. "The Currency Board Debate of the 1940s-1960s," Studies in Applied Economics 192, The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise.
    • Handle: RePEc:ris:jhisae:0192
    as

    Download full text from publisher

    File URL: https://sites.krieger.jhu.edu/iae/files/2021/10/The-Currency-Board-Debate-of-the-1940s-1960s.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. H. A. Shannon, 1952. "The Modern Colonial Sterling Exchange Standard," IMF Staff Papers, Palgrave Macmillan, vol. 2(2), pages 318-362, April.
    2. 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.
    3. John Williamson, 1995. "What Role of Currency Boards?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa40, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:zbw:bofitp:1999_009 is not listed on IDEAS
    2. Dorota Zuchowska, 2015. "Accession To The Eurozone As Lithuania’S Exit Strategy From The Currency Board System," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 10(3), pages 27-43, September.
    3. Pastor Jr., Manuel & Wise, Carol, 1999. "Stabilization and its Discontents: Argentina's Economic Restructuring in the 1990s," World Development, Elsevier, vol. 27(3), pages 477-503, March.
    4. Guergana Stanoeva, 2004. "Les caisses d’émission des Pays Baltes et de la Bulgarie : la recherche d’une crédibilité renforcée," Revue d'Économie Financière, Programme National Persée, vol. 75(2), pages 85-112.
    5. Neven Valev & John Carlson, 2007. "Beliefs about Exchange‐Rate Stability: Survey Evidence from the Currency Board in Bulgaria," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 10(2), pages 111-121.
    6. Pieter van Foreest & Casper de Vries, 2003. "The Forex Regime and EMU Expansion," Open Economies Review, Springer, vol. 14(3), pages 285-298, July.
    7. Yum K. Kwan & Francis T. Lui & Leonard K. Cheng, 2001. "Credibility of Hong Kong's Currency Board: The Role of Institutional Arrangements," NBER Chapters, in: Regional and Global Capital Flows: Macroeconomic Causes and Consequences, pages 233-259, National Bureau of Economic Research, Inc.
    8. Boris Blagov & Michael Funke, 2016. "The Credibility of Hong Kong's Currency Board System: Looking Through the Prism of MS-VAR Models with Time-Varying Transition Probabilities," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 895-914, December.
    9. Neven T Valev, 2006. "From a Currency Board to the Euro: Public Attitudes Toward Unilateral Euroisation in Bulgaria1," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(3), pages 480-496, September.
    10. Raoul Lättemäe, 2001. "Monetary transmission mechanism in Estonia - some theorethical considerations and stylized aspects," Bank of Estonia Working Papers 2001-4, Bank of Estonia, revised 13 Oct 2001.
    11. repec:spo:wpmain:info:hdl:2441/6961 is not listed on IDEAS
    12. Robert Haney Scott, 1997. "Pegged Exchange Rate Systems in Macau and Hong Kong," Multinational Finance Journal, Multinational Finance Journal, vol. 1(2), pages 153-168, June.
    13. Cappiello, Antonio, 2006. "I currency board come strumento di stabilizzazione economica: come funzionano e dove sono adottati [Currency boards as instrument for economic stabilisation: how they work and where they are adopte," MPRA Paper 4966, University Library of Munich, Germany.
    14. Yi-Chi Chen, 2013. "The Dynamics of Interbank Rate Behavior Under Alternative Monetary Regimes: The Case of Hong Kong," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-21.
    15. Alain Raybaut & Dominique Torre, 2004. "Unions monétaires, caisses d'émission et dollarisation : les fondements analytiques des systèmes de change « ultra-fixes »," Revue d'Économie Financière, Programme National Persée, vol. 75(2), pages 37-54.
    16. Iikka Korhonen, 2000. "Currency Boards in the Baltic Countries: What Have We Learned?," Post-Communist Economies, Taylor & Francis Journals, vol. 12(1), pages 25-46.
    17. Agus Fadjar Setiawan, 2002. "Lessons From Argentina’s Currency Board System For Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 5(3), pages 122-157, December.
    18. Yum K. Kwan & Francis Lui, 1999. "Hong Kong's Currency Board and Changing Monetary Regimes," NBER Chapters, in: Changes in Exchange Rates in Rapidly Developing Countries: Theory, Practice, and Policy Issues, pages 403-436, National Bureau of Economic Research, Inc.
    19. Neven Valev & John A. Carlson, 2002. "Tenuous Financial Stability," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0210, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    20. Jorge Carrera & Romain Restout, 2008. "Long Run Determinants of Real Exchange Rates in Latin America," Post-Print halshs-00276402, HAL.
    21. Miller, Jeffrey & Petranov, Stefan, 2001. "The Financial system in the Bulgarian economy," MPRA Paper 107704, University Library of Munich, Germany, revised Oct 2001.
    22. Berlemann, Michael & Nenovsky, Nikolay, 2003. "Lending of first versus lending of last resort: The Bulgarian financial crisis of 1996/1997," Dresden Discussion Paper Series in Economics 11/03, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.

    More about this item

    Keywords

    Currency board; debate;

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:jhisae:0192. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Steve H. Hanke (email available below). General contact details of provider: https://edirc.repec.org/data/iaejhus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.