Browsing by Subject "valuuttakomitea"

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  • Sepp, Urmas (1995)
  • Chen, Yu-Fu; Funke, Michael; Glanemann, Nicole (2009)
    BOFIT Discussion Papers 21/2009
    Hong Kong's currency is pegged to the US dollar in a currency board arrangement. In autumn 2003, the Hong Kong dollar appreciated from close to 7.80 per US dollar to 7.70, as investors feared that the currency board would be abandoned. In the wake of this appreciation, the monetary authorities revamped the one-sided currency board mechanism into a symmetric two-sided system with a narrow exchange rate band. This paper reviews the characteristics of the new currency board arrangement and embeds a theoretical soft edge target zone model typifying many intermediate regimes, to explain the notable achievement of speculative peace and credibility since May 2005. JEL-Classification: C61, E42, F31, F32 Keywords: currency board arrangement, target zone model, credibility, Hong Kong
  • Dale, Rasa (1997)
    This paper discusses currency boards, beginning with their history. Included in the paper is a discussion of how a currency board works and the advantages and disadvantages of the currency board, particularly when compared to a more traditional central banking style.The Estonian and Lithuanian currency boards are described and discussed as particular cases of currency board institutions.
  • Korhonen, Iikka (1999)
    BOFIT Discussion Papers 6/1999
    Published in Post-Communist Economies vol 12, no 1 (2000), pp. 25-46
    Sisällysluettelo: Abstract 5 1 Introduction 6 2 Currency board as an exchange rate arrangement 7 3 A short history of currency board arrangements 10 4 Currency boards in the Baltic countries 12 4.1 Monetary reforms in Estonia and Lithuania 12 4.1.1 Estonia 15 4.1.2 Lithuania 17 4.2 The rnacroeconomic effects of the Baltic currency boards 18 4.2.1 Inflation 20 4.2.2 Output 23 4.3 The Baltic currency boards and financial systems 25 4.4 Assessing the Baltic currency boards 27 5 Concluding remarks 32 References 34 Notes 37 Annex 39
  • Vetlov, Igor (2001)
    BOFIT Discussion Papers 1/2001
    The paper analyses the factors driving dollarization in Lithuania during the period from December 1992 to August 2000.Starting with a brief overview of the major economic and political developments in Lithuania, the study attempts to model the process of dollarization by applying rigorous time series analysis.In particular, it investigates the long- and short-run properties of the relationship between the dollarization ratio and interest rates paid on domestic and foreign currency deposits.The study identifies a relatively stable cointegrating relationship between variables, whereby the dollarization ratio is negatively related to the interest rate spread.In the constructed vector error correction model, the deviations from the long-run relationship are found be significant for the dynamics of all three variables. Overall, the model explains the development of dollarization rather well.Simple specification of the model is possible when interest rates reflect the major economic and political events relevant to the process of dollarization. Key words: dollarization, transition economy, currency board, unit roots, cointegration, vector error-correction
  • Sutela, Pekka (2001)
    BOFIT Discussion Papers 17/2001
    The three Baltic countries have been able to combine, Estonia since 1992 and Latvia and Lithuania since 1994, (1) a fixed exchange rate, (2) liberalisation of the capital account before having a well-functioning and fully supervised financial system, and (3) very large current account deficits.At the same time they have gone through deep structural and institutional change, which has been even faster than in several other transition economies.How have they been able to manage such a combination of characteristics that would usually be regarded inconsistent? The answer is not in clever management or control of financial markets combined with sound fundamentals.Rather, the Baltic countries have lacked several such markets that might be sources of instability.There are hardly any inter-bank markets.Public debt is absent or relatively very small.After the boomlet of 1997, the Baltic stock exchanges have generally hibernated.Banking crises have been recurrent.Not only are these economies extremely small, their degree of monetisation is very low.There are very few assets and markets for speculative capital flows. Partially, this reflects sound fundamentals, but mostly it is an unintended consequence of policy decisions.One cannot expect the experience to be easily repeated in other countries. Key words: the Baltic countries, capital flows and controls, financial crises, currency boards
  • Chen, Yu-Fu; Funke, Michael; Glanemann, Nicole (2010)
    BOFIT Discussion Papers 6/2010
    Published in Studies in Nonlinear Dynamics and Econometrics, 2013; 17(4): 373-393
    This paper provides a modelling framework for evaluating the exchange rate dynamics of a target zone regime with undisclosed bands. We generalize the literature to allow for asymmetric one-sided regimes. Market participants' beliefs concerning an undisclosed band change as they learn more about central bank intervention policy. We apply the model to Hong Kong's one-sided currency board mechanism. In autumn 2003, the Hong Kong dollar appreciated from close to 7.80 per US dollar to 7.70, as investors feared that the currency board would be abandoned. In the wake of this appreciation, the monetary authorities finally revamped the regime as a symmetric two-sided system with a narrow exchange rate band. Keywords: Currency Board Arrangement, Target Zone Model, Hong Kong JEL-Classification: C61, E42, F31, F32
  • Pikkani, Rasmus (2000)
    BOFIT Online 2000-10
    Modeling work on Estonian data indicates that external financing of the private sector has strong impact on domestic demand, which implies that valuable insights may be gained in this case from understanding the behavioral relationships in the monetary sector. The current paper provides a theoretical analysis of the monetary sector under a currency board regime and applies specification tests to Estonian data.As a final product, empirical equations for average lending rate, loans provided to the private sector and money demand are estimated.While estimations herein use monthly data, quarterly modifications of the model will be inserted into Eesti Pank's quarterly macromodel in the future. Key words: currency board, economic modelling, bank lending, capital flows, Estonia
  • Blagov, Boris; Funke, Michael (2013)
    BOFIT Discussion Papers 24/2013
    Published in Macroeconomic Dynamics, Vol 23, No 6 (2019), pp. 2434-2468
    An estimated Markov-switching DSGE modelling framework that allows for parameter shifts across regimes is employed to test the hypothesis of regime-dependent credibility of Hong Kong's linked exchange rate system. The model distinguishes two regimes with respect to the time-series properties of the risk premium. Regime-dependent impulse responses to macroeconomic shocks reveal substantial differences in spreads. These findings contribute to efforts at modelling exchange rate regime credibility as a non-linear process with two distinct regimes. Keywords: Markov-switching DSGE models, exchange rate regime credibility, Hong Kong. JEL-Classification: E32, F41, C51, C52