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Currency Boards in Retrospect and Prospect$
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Holger C. Wolf, Atish R. Ghosh, Helge Berger, and Anne-Marie Gulde

Print publication date: 2008

Print ISBN-13: 9780262232654

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262232654.001.0001

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PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2018. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 23 September 2019

Stylized Facts

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Chapter:
(p.60) (p.61) 5 Stylized Facts
Source:
Currency Boards in Retrospect and Prospect
Author(s):

Wolf Holger C.

Ghosh Atish R.

Berger Helge

Gulde Anne-Marie

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262232654.003.0005

This chapter reviews evidence on the benefits and costs of currency boards. It first considers the behavior of inflation, money growth, and interest rates under various exchange rate regimes. It then turns to the “real” side of the economy—exports, investment, and output growth. Next it examines whether countries with currency boards are more susceptible to financial crises. Currency boards are associated with lower inflation compared to other fixed exchange rate systems and floating rates. However, countries operating under currency board arrangements (CBAs) have experienced more volatile output growth, presumably because of the loss of the nominal exchange rate as an adjustment tool.

Keywords:   currency boards, inflation, money growth, interest rates, exchange rate regimes, financial crises

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