The Money Supply in Currency Boards

The Johns Hopkins Institute for Applied Economics, Global Health and the Study of Business Enterprise, Studies in Applied Economics, Working Paper No. 3

35 Pages Posted: 23 Apr 2013

See all articles by Nicholas Krus

Nicholas Krus

Johns Hopkins University - Institute for Applied Economics, Global Health, and Study of Business Enterprise

Date Written: November 1, 2012

Abstract

How does a currency board obtain monetary equilibrium? This paper provides an in-depth analysis of the money supply in currency boards in order to review their monetary stability. After many years of neglect by economists and policymakers, currency boards enjoyed a revival in the 1990s. Although no new currency boards have been established since 1997, economists continue to consider them from time to time as a possibility for monetary reform in some countries. This paper hypothesizes that there are certain circumstances under which a currency board maintains monetary equilibrium while an unorthodox currency board may not. By taking a balance sheet model approach, one can make more definitive conclusions about the workings and efficacy of various currency boards.

Keywords: Nicholas Krus, Currency, Boards, Money, Supply, Johns Hopkins Institute, Applied Economics

Suggested Citation

Krus, Nicholas, The Money Supply in Currency Boards (November 1, 2012). The Johns Hopkins Institute for Applied Economics, Global Health and the Study of Business Enterprise, Studies in Applied Economics, Working Paper No. 3. Available at SSRN: https://ssrn.com/abstract=2189059 or http://dx.doi.org/10.2139/ssrn.2189059

Nicholas Krus (Contact Author)

Johns Hopkins University - Institute for Applied Economics, Global Health, and Study of Business Enterprise ( email )

3400 N. Charles Street
Baltimore, MD 21218
United States

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