Lithuania: History and Future of the Currency Board Arrangement:

 
Author/Editor: Alonso-Gamo, Patricia ; Fabrizio, Stefania ; Kramarenko, V. ; Wang, Qing
 
Publication Date: August 01, 2002
 
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Summary: The paper examines the evolution of the institutional setup of Lithuania's Currency Board Arrangement (CBA) and competitiveness from 1994 through 2001, with a view to determining the resilience of the Lithuanian CBA to external shocks in 2002-03. First, several indicators of competitiveness are analyzed in the context of productivity gains and flexibility of the labor market and prices are considered. Then, the equilibrium exchange rate and misalignments of the actual rate from it are estimated in a cointegration framework. The paper concludes that, under current policies, the CBA would be able to cope with sizable external shocks during 2002-03 provided supporting policies remain in place.
 
Series: Working Paper No. 02/127
Subject(s): Currency boards | Lithuania | Real effective exchange rates

Author's Keyword(s): Real effective exchange rate | competitiveness | currency board arrangement
 
English
Publication Date: August 01, 2002
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA1272002 Pages: 35
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