Naslov
European currency board arrangements: a post- transition reappraisal

Autori
Kordić, Gordana

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Proceedings of FEB Zagreb 13th International Odyssey Conference on Economics and Business / Sever Mališ, Sanja ; Jaković, Božidar ; Načinović Braje, Ivana - Zagreb : Ekonomski fakultet Sveučilišta u Zagrebu, 2022, 542-552

Skup
13th International Odyssey Conference on Economics and Business

Mjesto i datum
Dubrovnik, Hrvatska, 01.06.2022. - 04.06.2022

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
currency board arrangement ; European monetary union ; exchange rate regime

Sažetak
Belonging to a group of hard pegged regimes, Currency Board Arrangement (CBA) is a rather rare choice of exchange rate regime, primary because of its strict rules and lack of developing potential caused by limited monetary sovereignty. Still, back in the early 1990s, CBA became exchange rate regime choice for a certain number of former European centrally planned economies during the period of transition. After three decades of transition, we are able to reappraise the use of CBA in Europe. Since CBA relies on strong administrative rules, it has a limited scope of use, primary in small open economies that have problems with price stability, economic instability and/or underdeveloped institutions. Apart from its rigidity, the CBA regime enabled countries to achieve stability and control inflation, while developing institutions and markets at the same time. Furthermore, in later practice, it was in use in countries that regained their sovereignty and (re)introduced national currency as a part of sovereignty. During the periods of instability and crisis, priority goals remained the same - retaining the stability and rules of the regime, besides possible costs. In addition, exit strategy is an important part of every regime, whether it is becoming a part of a wider integration or switching to a more flexible regime. The European CBAs have a clear goal from the start of the transition process – membership in European Economic and monetary union. Since the CBA synchronizes the economies’ cycles, countries that entered so far did not face adjustment problems. Since we are focused on European countries’ experience, countries are divided in three categories: those that are members of Eurozone (Estonia, Lithuania), then the ERM 2 participant (Bulgaria) and the one still outside EU (Bosnia and Herzegovina). Expectedly, , number of European countries using CBA is decreasing as they enter the European monetary union (EMU) and no new countries are using this regime. Main goal of the paper is to summarize experiences of CBAs in European countries that entered the European economic union and analyze costs and benefits of its use during the turbulent periods in national and global economies. The analyses is provided on historical data, covering main macroeconomic indicators and convergence criteria. Research followed the theoretical discussion on pros and cons of exchange rate policy based on a rule. In addition, experience of CBA economies during the crisis is also valuable, especially since they did not abandon the regimes.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA