Teeth for the Bulgarian Lev: A Currency Board Solution

Washington, D.C.: International Freedom Foundation, 1991

36 Pages Posted: 30 Apr 2013  

Steve H. Hanke

Johns Hopkins University - Department of Economics

Kurt Schuler

Center for Financial Stability

Abstract

Bulgaria needs to give its monetary reform instant credibility, to avoid the dangers of continuing inflation on the one hand and depression on the other. A fixed exchange rate system with a central bank always fails. There is, however, one proven system that will successfully maintain a fixed exchange rate - the currency board system. To establish monetary confidence in the Lev, Bulgaria should replace its central bank with a currency board. A currency is explicitly designed to maintain a fixed exchange rate. A board is easy to establish and operate, and it has worked successfully time and time again. Indeed, currency boards have always been able to maintain fixed-rate currency convertibility, even during the most trying times.

Keywords: Steve, Hanke, Kurt, Schuler, Currency, Board, Solution, Bulgarian, Lev, Teeth, International, Freedom, Foundation

Suggested Citation

Hanke, Steve H. and Schuler, Kurt, Teeth for the Bulgarian Lev: A Currency Board Solution. Washington, D.C.: International Freedom Foundation, 1991 . Available at SSRN: https://ssrn.com/abstract=2258005

Steve H. Hanke (Contact Author)

Johns Hopkins University - Department of Economics ( email )

3400 Charles Street
Baltimore, MD 21218-2685
United States
410-516-7183 (Phone)
410-516-8996 (Fax)

Kurt Schuler

Center for Financial Stability ( email )

New York, NY
United States

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